Question about seasoning my loan amortization model

A senior analyst told me I was overcomplicating the prepayment assumptions by using a 10-year CPR curve. She said just use a flat 8% prepayment and see if the cash flows still work. Anyone else get called out for building models too detailed for DSCR loans?

3 comments

3 Comments

cora_scott772mo ago

Didn't she mean that simpler models are better for those loans...

skylerp312mo ago

Wait, are we sure "simple" here means "easy to understand" and not "lacking features?" What if she's actually warning that those models miss critical edge cases that keep popping up in the data?

-1

sage_ramirez422mo ago

@cora_scott77 is right and 8% flat is too clean for how these loans actually act.