The Economics of Where, since 1990.
University Financial Associates was founded in 1990 by two professors of finance with a conviction that was contrarian at the time: that where a loan is made matters nearly as much as who it is made to. Three decades of research, millions of analyzed loans, and one accurately anticipated mortgage crisis later, that conviction underpins everything UFA builds - from the ForeScore analytics suite to the quarterly UFA Default Risk Index.
UFA's principals are active academics who publish in peer-reviewed journals, and consultants who have worked with institutions including Citicorp, GE Capital, Household Finance, Fannie Mae, and Freddie Mac, as well as government agencies including the Resolution Trust Corporation, HUD, and Canada Mortgage and Housing Corporation. That dual identity is deliberate. Clients get methods that survive peer review, applied to decisions that move loan-level P&L.
"Most bad loans are made in the good times."
- Alan Greenspan, March 2000
Our Principals
Dennis R. Capozza, Ph.D.
Founding Principal · Professor Emeritus of Finance, Ross School of Business, University of Michigan
Dr. Capozza has published more than 100 articles integrating modern finance theory into real estate and lending practice, pioneering the use of contingent claims and arbitrage methods to value consumer loans in papers including "Mortgage Default in Local Markets," "The Conditional Probability of Default," and "Optimal Stopping and Losses on Subprime Loans." He is a former editor of Real Estate Economics and has served on the faculties of MIT, the University of British Columbia, and USC. He holds a B.A. from the University of Pennsylvania and a Ph.D. in economics from Johns Hopkins University.
His consulting clients have included Citicorp, Household Finance, GE Capital, Fannie Mae, Freddie Mac, Berkshire Mortgage Finance, and Impac Mortgage Holdings.
Lawrence M. Benveniste, Ph.D.
Founding Principal - Professor Emeritus of Finance, Goizueta Business School, Emory University
Dr. Benveniste has served as dean of two leading business schools — the Carlson School of Management at the University of Minnesota, where he held the U.S. Bancorp Chair, and the Goizueta Business School at Emory University. Earlier in his career he served on the staff of the Board of Governors of the Federal Reserve System, helping devise systems for monitoring risk-based capital requirements, intraday payments-system exposure, and deposit insurance reform.
His consulting work spans major commercial banks, savings institutions, the Resolution Trust Corporation, and REITs, including methods for projecting mortgage default risk, complex financial and real estate valuation, and incentive-oriented contract design.
Ryan D. Israelsen, Ph.D.
Principal · Kaufman Endowed Professor in Insurance and Risk Management and Professor of Finance, Eli Broad College of Business, Michigan State University
Dr. Israelsen has published numerous research articles on asset pricing, information, intangible capital, public finance, and real estate finance. He holds an M.A. in Financial Engineering from the University of Michigan and a Ph.D. in Finance from the the Ross School of Business at the University of Michigan.
At the heart of UFA’s offerings is the ForeScore™ Software Suite, whose components are the ForeScore™ Risk Analyzer, the ForeScore Loan Analyzer™, and the ForeScore Loan Underwriter™. ForeScore™ allows lenders to extract the implications of existing data and then project forward to arrive at a lending strategy, instead of using past results as a benchmark for the future. Thus, the ForeScore™ system evaluates not only borrower credit but also the product structure, the collateral, and local economic conditions. Perhaps more importantly, with ForeScore™, lenders more than just "cover" exposures but take advantage of existing lending markets and conditions.
ForeScore™ allows lenders to recover profitable loans from its pool of applicants and also increase loan volume—where appropriate—while holding expected defaults constant. As a result, nonprime lenders can more safely participate in the expansion of growth industries and other types of lending subject to higher than normal default rates. In a way, normalcy is expanded to a greater pool of opportunities, which contributes to economic growth.
Founding Principal Dr. Lawrence Benveniste has provided consulting services for major commercial banks, savings and loans, the Resolution Trust Corporation, real estate investment trusts, and financial consulting firms. His services have included advising on mergers, complex financial and real estate valuation, development of methods to project default risk in mortgage loans, and designing incentive oriented contracts. He has also developed an array of financial software products including highly sophisticated mortgage and real estate valuation products.
Dr. Benveniste is currently Dean at the University of Minnesota Carlson School of Management, where he also holds the U.S. Bancorp Chair. Among previous positions, Dr. Benveniste served on the staff of the Board of Governors of the Federal Reserve System in Washington D.C., where he helped devise systems for monitoring risk-based capital requirements, intraday exposure from payments systems and deposit insurance reform.
Founding Principal Dennis R. Capozza, Professor of Finance and the Dale Dykema Professor of Business Administration in the Ross School of Business at the University of Michigan, has extensive consulting experience with lenders and real estate-related firms including Citicorp, Household Finance, Conseco Finance, Providian Financial, FNMA, Freddie Mac, Berkshire Mortgage Finance, and Impac Mortgage Holdings.
Dr. Capozza has contributed more than 100 articles to journals and books and is a leader in integrating the modern theory of finance into real estate and lending. In particular, he has pioneered the use of contingent claims and arbitrage methods to value mortgages and mortgage-related instruments, as well as having written extensively on land pricing in urban areas. Dr. Capozza is also co-editor of the Journal of Financial Abstracts: Real Estate and a previous editor of Real Estate Economics.
Principal Dr. Ryan D. Israelsen is Associate Professor of Finance and the Pasant Research Fellow in the Eli Broad College of Business at Michigan State University. He has published numerous research articles on asset pricing, information, intangible capital, public finance, and real estate finance.