29.2 Procedure For Setting Up ADCo Process

The steps to set up an ADCo process are as follows:

1. Mapping of the ADCo function to BSP Admin user.
2. Set up the 7 Indices to use with ARMs.
3. Set up the 2 years, 10 year rate IRCs.
4. Set up the National HPI.
5. Load the STG_LOAN_CONTRACTS table.
6. Run the T2T batch to populate the FSI_D_MORTGAGES table.
7. Select the NHPI from Application Preferences.
8. Forecast the 2 years, 10 year rate IRCs.
9. Forecast the 7 indices (only required where indices are mapped to ARMs).
10. Forecast the National HPI (optional).
11. Setup the Prepayment rule mapping the ADCo method to the required Mortgage – USD combinations.
12. Setup the Static Deterministic Process including the rules defined above (Forecast Rates and Prepayments).
13. Select the SMM Rates Output flag (optional).
14. Execute the Process.

The detailed procedure for using the ADCo prepayment method comprises utilizing the above mentioned specific settings in various BSP modules as documented in the following sections.