Bear Stearns Selects Mortgage Risk Indexes for New Prepayment Model

JERSEY CITY, N.J., Aug. 18, 1999 /PRNewswire/ -- Bear Stearns recently introduced a new ground breaking prepayment model for non-agency mortgage- backed securities that is implemented entirely at the property level. The model incorporates valuable new prepayment data available in the non-agency sector and, for the first time, brings the full power and precision of property level information directly to the mortgage investor. The result is a level of confidence in cash flow projections that is greater than that in the agency sector where loan level information in not available.

"This is the most significant work ever done on prepayment modeling," stated Chuck Ramsey, C.E.O. of Mortgage Risk. The most unique aspect of the model is that it is implemented entirely at the property level. One of the key features of the model is the use of zip code level home price data used to update loan-to-value information monthly, provided by Mortgage Risk Assessment Corporation.

Dale Westhoff, Senior Managing Director and creator of the model stated, "Our studies indicated that the borrower's current equity position in the home is a key determinant of both refi and housing turnover prepayment behavior." The Financial Analytics and Structured Transactions (FAST) group at Bear Stearns developed the model, recently described in the street as the first of the new "Super Models."

If you would like more information on Bear Stearns contact Dale Westhoff at 212-272-2662 or visit their website at www.BearStearns.com.

If you would like more information on Mortgage Risk contact Chuck Ramsey at 281-368-1600 or visit their website at www.MortgageRisk.com.

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