Optimal Blue recently co-authored an article with Andrew Davidson & Co., Inc. (AD&Co), a leading provider of risk analytics and consulting for residential lending and MBS, titled Market Volatility and the Anatomy of Mortgage Rates. This timely article examines mortgage market pricing dynamics and how they have been impacted by the recent extreme market volatility spurred by the global impact of COVID-19 (Coronavirus Disease 2019).

These are unprecedented times for all of us in many ways, and the mortgage industry is no exception – record low rates, record high volume, overflowing pipelines, and the challenges of processing and closing a loan under tight restrictions on social interactions. Things are moving extremely fast! So fast, in fact, that the recent Fed announcement that the Fed Funds rate was reduced to near zero and would re-institute Quantitative Easing occurred after we finalized this article. Regardless, while the primary rate to 10-year treasury rate spread has tightened as a result of the Fed actions, the concepts still apply and the spread remains historically high.

In this article, Optimal Blue’s actionable data and insights on current origination activity was combined with the AD&Co secondary market and risk expertise, to explore the recent behavior and dynamics of primary market mortgage rates and their determining factors.

Click here to read the full article.

Andrew Davidson & Co., Inc. (AD&Co) was founded in 1992 by Andy Davidson, an international leader in the development of financial research and analytics, mortgage-backed securities product development, valuation and hedging, housing policy and GSE reform and credit-risk transfer transactions. Since its inception, the company has provided institutional fixed-income investors and risk managers with high quality models, applications, consulting services, research and thought leadership, aimed at yielding advanced, quantitative solutions to asset management issues. AD&Co’s clients include some of the world’s largest and most successful financial institutions and investment managers. For more information, visit www.ad-co.com.


Robert J. Brandt
Vice President, Marketing & Strategic Alliances
(469) 609-5585