Configure Cash Flow Forecaster drivers

The Cash Flow Forecaster driver includes settings that control cash flow forecaster-related drivers.

Open the Cash Flow Forecaster driver

Cash flow forecaster drivers are unique to each file group.

To configure the Cash Flow Forecaster drivers file:

  1. From the Command Center, click Financial Planning.
  2. Open a budget, scenario, or forecast to work with.
  3.  Click the Drivers & Assumptions tab.

  4. Click the Cash Flow Forecaster Drivers link.

    NOTE: The driver opens in the Desktop Client.

Settings sheet

To configure the Settings sheet:

  1. Complete the configuration of the following options:

    Option Description
    Use alternate payment schedules

    Do the one of the following:

    • To enable the Cash Flow Forecaster to use principal payment amounts that are present in the AlternatePaymentSchedules table, select Yes.
    • To enable the Cash Flow Forecaster to ignore any alternate payment amounts stored in the AlternatePaymentSchedules table, select No .
    Additional multipass filter for Cash Flow Forecaster

    NOTE: This setting is optional.

    The base multipass filter applied to Cash Flow Forecaster is “ITYPE IN ('A','F') AND AX_CurBal > 0 AND AX_IsNonMaturity = 0.”

    Do one of the following:

    • To apply additional multipass data filters, add additional data filter criteria.

    • If no additional data filter is required, leave the field blank.
    Default OfficerID for super instruments

    NOTE: This setting is optional.

    The default OfficerID is applied to cash flow records that are aggregated into super instrument IDs (see Sum CFF results into super instrument ID).

    If cash flow results are aggregated into super instrument IDs, select the default OfficerID from a valid OfficerID in the Officer table.
    Enable cash flow forecaster logging

    Do one of the following:

    • To enable Cash Flow Forecaster to perform a series of quality assurance checks on the cash flow results of every instrument processed, and then save any messages related to questionable results to the CFFLog table, select Yes .

      NOTE: You can access CFFLog records using the Cash Flow Forecaster Log reports (see Sum CFF results into super instrument ID).

    • If you do not need Cash Flow Forecaster to log messages about calculated results, select No .
    Seed CFFDrivers sheet from another CFF drivers table?

    NOTE: This setting is optional.

    Do one of the following:

    • To seed the CFFDrivers worksheet of the Cash Flow Forecaster driver with CFF driver settings from another file group, select Yes .
    • To not seed the CFFDrivers worksheet of the Cash Flow Forecaster Drivers file with CFF driver settings from another file group. select No .
    Source CFF drivers table

    NOTE: This setting is optional.

    If you selected Yes in the Seed CFFDrivers sheet from another CFF drivers table field above, do the following:

    1. Double-click the ellipsis next to the field name.

    2. In the Choose Value dialog, select the applicable CFF driver tables.

    3. Click OK.

  2. In the Mainribbon tab, click Save.

  3. Continue to the PrepaymentRates tab.

PrepaymentRates tab

As an optional step, you can use the PrepaymentRates sheet to create and populate payment rate tables with multiple factors.

TIP: While you are not required to process the Cash Flow Forecaster, we recommend configuring this sheet to help project prepayments more accurately.

Use Axiom’s multifactor prepayment rate tables to define annual prepayment rates using the following factors.

To configure the PrepaymentRates tab:

  1. To add a prepayment category, click the Add a prepayment category link.

  2. In the Calc Method Variables dialog, complete the following, and then click OK:

    Option Description
    Prepayment Category

    You can define the prepayment category for a product or a group of products. You enter this content into the field free-form.

    For example, to create a prepayment category for 5/1 30-year adjustable rate mortgage (ARM) products, you would type "5/1 30 year ARMs." To create a generic prepayment category for residential mortgages, you would type "Residential Mortgages."
    Refinance Incentive Market Index

    For Cash Flow Forecaster to properly quantify the refinance incentive, select the market rate upon which the refinance incentive will be based.

    To select an index, click Choose Value, select the index, and then click OK.

    TIP: The interest index you select should be the prevailing interest index. The system displays the codes from the InterestIndex table.
    Refinance Incentive Range Number This number is the difference between the loan rate and the selected market rate. Use this rate to determine the incentive to prepay a loan.

  3. Populate the minimum and maximum coupon rate minus market rate for each refinance incentive range number in ascending order. Axiom inserts the new prepayment category table, populated with inputs for which you were prompted. Prepayment rates should have a positive relationship with the spread between the coupon rate and the market rate. As the spread increases, so does the prepayment rate.

    TIP: By default, the prepayment rate table has 20 distinct refinance incentive ranges. If 20 refinance incentive ranges exceed the preferred layout, delete the unnecessary ranges from the calc method after it has been inserted. Always delete calculation method rows from the bottom up, as columns that are hidden to the left have formulas that are dependent upon preceding rows.

  4. Populate prepayment rates in each projected month of each refinance incentive range.

    NOTE: Listed Prepayment Category descriptions in the PrepaymentRatesTable worksheet correlate to the MultiFactor Prepayment Category column of the CFFDrivers sheet.

  5. In the Main ribbon tab, click Save.

  6. Continue to the CFFDrivers tab.

CFFDrivers tab

This worksheet functions as follows:

  • If in the Settings sheet, you selected Yes for the Seed CFFDrivers sheet from another CFF driver table? option, this sheet populates with drivers from the table you selected.
  • If you selected No for the Seed CFFDrivers sheet from another CFF driver table? option, the sheet populates with drivers previously saved.
  • If no drivers have been saved, the system returns a list of blank records, which are grouped by ACCT/PROD/ITYPE, from the InstModelStg (Instrument Model Staging) table.

TIP: The system adds new ACCT/PROD/ITYPE combinations that are not present in the CFFDrivers worksheet to the worksheet. As a result, must configure settings for those new items.

To configure the CFFDrivers tab:

  1. Configure the following options for each account (ACCT), product (PROD), and interest type (ITYPE) combination:

    Option Description
    Sum CFF results into a super instrumentID

    To conserve table space and optimize CashFlow table query performance, the Cash Flow Forecaster engine can sum instrument level results by account/product/interest type/department into a Super InstrumentID.

    The Cash Flow Forecaster saves 11 records for every instrument processed which, depending on the size of the data file and how many cash flow forecaster result sets are archived, could result in millions of records in the CashFlow table.

    TIP: Very large tables can have slow query performance.

    You can disable this setting by setting rows to FALSE. For example, you might leave this setting as TRUE for large consumer portfolios such as auto loans or mortgage portfolios with high volumes and low balances, but set as FALSE for commercial loans with low volumes and high balances.
    Use a multifactor prepayment rate

    NOTE: This setting is optional.

    Do one of the following:

    • To use a multifactored prepayment rate rather than the Default CPR for the account/product/interest type combination, select TRUE.

    • To use the default Constant Prepayment Rate (CPR), select FALSE.
    Multifactor prepayment category

    NOTE: This setting is optional.

    If you selected TRUE for the Use a multifactor prepayment rate, select a prepayment category from the PrepaymentsRatesTable worksheet. Double-click the ellipsis next to the Multifactor prepayment category column. See Axiom's multifactor prepayment rates table for more information about creating multifactor prepayment rates.
    Default CPR

    NOTE: This setting is optional.

    The system converts the default CPR into a single month mortality rate (SMM) and applies it to each month in the Cash Flow Forecaster.

    NOTE: The system applies the default CPR in the event that Cash Flow Forecaster fails to find a multifactor prepayment rate. Cash Flow Forecaster fails to find a multifactor prepayment rate only when the Use a multifactor prepayment rate is set to TRUE and the MultiFactor prepayment category is either blank or does not match prepayment categories created on the PrepaymentRatesTable worksheet.
    Do not use instrument prepayment data

    NOTE: This setting is optional.

    This setting applies only when prepayment types and prepayment rates are included in instrument records (the Treasury table may contain prepayment data for CMOS and MBS).

    Do one of the following:

    • To allow the CFF utility to use instrument prepayment data if it exists, select FALSE .

      NOTE: CFF only uses prepayment data from the driver table for instruments without prepayment data.

    • To ignore record data and use only prepayment information mapped from the driver table, select TRUE.

  2. On the Axiom ribbon tab, click Save.

  3. Close the Cash Flow Forecaster driver file.

The Cash Flow Forecaster is now ready for use. See Running the Cash Flow Forecaster for more information.