Applying Model Validation Principles to Machine Learning Models

Machine learning models pose a unique set of challenges to model validators. While exponential increases in the availability of data, computational power, and algorithmic sophistication in recent years has enabled banks and other firms to increasingly derive actionable insights from machine learning methods, the significant complexity of these systems introduces new dimensions of risk. When…

The Surging Reverse Mortgage Market

Momentum continues to build around reverse mortgages and related products. Persistent growth in both home prices and the senior population has stoked renewed interest and discussion about the most appropriate uses of accumulated home equity in financial planning strategies. A common and superficial way to think of reverse mortgages is as a “last-resort” means of…

Freddie Mac Single Family Loan-Level Data Analysis: Originations

As part of the ongoing support for their credit risk transfer program, in March 2016 Freddie Mac released updated single family loan-level data containing origination and performance records on 21.8 million loans originated between January 1999 and March 2015. Using RiskSpan’s data discovery tool, RS Edge, the origination characteristics of the loans originated from 1999 to 2014 were analyzed.