General Services
Quantitative Services    
MBS Advisory Services    
Derivative Products    
Capital Adequacy Analyses    

General Services

Caine Mitter provides a full range of financial advisory services involving multifamily, single family, down payment assistance and home improvement financings by housing finance agencies, including:

  • Advising on program design
  • Determining the optimal method of bond sale
  • Advising on bond pricing
  • Conducting competitive bids for GICs and other investments
  • Commenting on bond documents
  • Advising on the selection of underwriters, remarketing agents, bond counsel and liquidity and credit enhancement providers
  • Reviewing the performance of underwriters and remarketing agents
  • Performing financial analysis and planning
  • Advising on the sale of assets
  • Assisting in rating agency relations
  • Monitoring the impact of federal tax law on housing finance agency programs
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Quantitative Services

Caine Mitter provides a full range of quantitative services to housing finance agencies including:

  • Structuring bond issues and financial products
  • Preparing rating agency and management cash flows
  • Calculating bond and mortgage yields and universal cap compliance
  • Calculating 32- and 10-year rule compliance and genealogy
  • Analyzing and carrying out bond redemption strategies
  • Analyzing agency financial strength
  • Arbitrage rebate services

Caine Mitter provides quantitative services using proprietary software specifically developed to model the activities of housing finance agencies. The software uses a modern platform enabling quick updates to reflect current financing structures and the unique activities of individual housing finance agencies.

Since its inception in 1978, Caine Mitter has been recognized consistently for its leadership and innovation in quantitative analysis for housing finance agencies. The firm’s professionals have prepared cash flows and yield calculations for over 20 State housing finance agencies.
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Mortgage-Backed Security (MBS) Advisory Services

Caine Mitter provides a comprehensive set of services to housing finance agencies related to managing the pipeline ranging from mortgage loan reservation to securitization to MBS delivery. The firm's professionals work with housing finance agencies to maximize income and minimize risk.

Caine Mitter facilitates the process by providing a range of services including:

  • Servicing strategies and document negotiation
  • Market monitoring and mortgage rate daily rate sheets
  • TBA counterparty selection and document negotiation
  • Pipeline management from reservation to MBS delivery
  • TBA transaction execution and settlement
  • MBS pool structuring to maximize value
  • Integration of TBA and MRB programs

Caine Mitter provides regular updates on hedge positions, the status of all reservations, mortgages and MBSs, mark-to-market data and the expected net benefit of TBA and MBS transactions. Information is presented in clear, comprehensive reports.

Caine Mitter currently performs comprehensive MBS advisory services for seven housing finance agencies and has executed over $1 billion MBS/TBA trades.
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Derivative Products

Caine Mitter provides a full range of services related to derivative products for housing finance agencies including:

  • Advising on the benefits and risks of derivative products
  • Developing derivative policies
  • Selecting counterparties and negotiating ISDAs
  • Structuring interest rate swaps
  • Pricing initial transactions and periodic valuations
  • Performing the required calculations for accounting purposes

The firm’s combination of housing finance and derivatives expertise makes it uniquely qualified to negotiate terms and discover opportunities that are specifically tailored to housing finance agencies and the special tax rules by which they are governed. No other financial advisor or swap advisor has this combination of expertise.

Since 2002, the firm has advised seven housing finance agencies on over 70 derivative transactions.

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Capital Adequacy Analyses

Caine Mitter provides various housing finance agencies with periodic, in depth analyses of the financial strength of their programs. These capital adequacy studies analyze the resources that are available for new programs while maintaining the financial integrity of existing programs. Using cash flow projections, the impact of different scenarios and assumptions are accurately modeled and analyzed, and a range of future available funds is estimated. The scenarios and assumptions include variations of:

  • Projected bond issuance
  • Prepayment speeds
  • Interest rate levels and interest rate relationships
  • Loan loss exposure
  • Rating agency requirements
  • Recycling of prepayments
  • Changes in income
  • New origination volume
  • Mortgage loan portfolio characteristics, such as mortgage loan product type and mortgage insurance

After analyzing these cash flow projections, the results are depicted in tables and graphs that provide an understandable presentation of the resources and events that will limit such resources.

Caine Mitter has performed capital adequacy studies for six housing finance agencies.
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