Providing Accurate Financial Forecasts Since 1990

University Financial Associates was founded in 1990 by two renowned professors of finance to bring state-of-the-art analytical techniques to lenders. The principals bring over fifty years of experience in mathematical modeling and data analysis to financial problem-solving. Our data, analysis, and modeling can help your business make better lending and investing decisions.

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Founding Principal & Professor Emeritus of Finance

Dennis Capozza is a founding principal of University Financial Associates LLC and is Professor Emeritus of Finance in the Ross School of Business at the University of Michigan. Dr. Capozza has extensive consulting experience with lenders and real estate related firms including Citicorp, Household Finance, GE Capital, Onyx Acceptance, FNMA, Freddie Mac, Berkshire Mortgage Finance, and Impac Mortgage Holdings.

He earned a B.A. degree from the University of Pennsylvania and a Ph.D. (Economics) from Johns Hopkins University. He has also served on the faculties at the Massachusetts Institute of Technology, the University of British Columbia and the University of Southern California.

Dr. Capozza has contributed over 100 articles to journals and books and is a leader in integrating the modern theory of finance into real estate and lending practice. He pioneered the use of contingent claims and arbitrage methods to value consumer loans and related instruments in his articles The Variable Rate Mortgage and Risk in the Mortgage Market, Optimal Mortgage Instrument Designs, Mortgage Default in Local Markets, The Conditional Probability of Default and Optimal Stopping and Losses on Subprime Loans.

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Lending a Hand to Less-Risky Reward

Consistency. Predictability. A sound reckoning of potential gains and losses. The power to know not just where and, maybe, when but also how good, how bad, how much.

Until recently, in many ways, forecasting the nation’s economic climate with respect to business and consumer lending and investment could be as tricky as forecasting the weather. Even the more sophisticated financial models were better at looking back than forward, were more qualitative than quantitative in scope, and had a hard time gauging the impact of local business conditions. The latter can include such "site-specific" factors as home starts, home mortgage debt, repayment rates on all types of loans, business startups and defaults, labor supply and wages, intrinsic industry fortunes, and public policy with respect to taxation and regulatory enforcement.

The situation can get even stickier with nonprime lending, the higher risk and reward type of lending that has increasingly provided the glue and rocket fuel for our economy—getting more people into more homes; getting more businesses going by lending startup equity or expansion credit and capital to innovative business ventures. Furthermore, the residuals derived from such loans carry a much higher "mistake" potential than traditional bank lending, often as great as 30 percent to 40 percent of exposure. This is the New Hope and New Ideas lending that does carry New Risks.

A way out of this conundrum is being supplied by Ann Arbor, Michigan-based University Financial Associates LLC (UFA), developers of ForeScore™, revolutionary loan portfolio analysis software, and the UFA Mortgage Report™. Once again, Midwest brains and techno-age brawn are proving to be on the cutting edge of a high-tech industry; in this case, not global vehicle design and engineering, but financial services.

The need for ForeScore™ is significant. UFA was founded in 1990 by two renowned professors of finance to bring state-of-the-art analytical techniques to lenders. The principals, Lawrence Benveniste and Dennis R. Capozza, brought over fifty years of experience in mathematical modeling and data analysis to financial problem-solving.

Among its proprietary software programs and consultancy, UFA is helping nonprime lenders increase profits and control risks through statistical and econometric modeling, practical application of the latest financial theories, and its extensive regional economic databases and analysis in such key areas as: Corporate and portfolio risk management; Loan marketing; Product pricing and structuring; and Loan underwriting and valuation.

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.