Fundamental models in finance seek to
(1) identify the principal factors that drive the performance of a certain type of financial assets and
(2) quantify the relationship between the factors and the performance of the assets.
These factors typically include macro economic variables as well as financial attributes related to the assets.

In this talk, the financial assets, as an example, are the US Residential Mortgage Loans. The principal factors range from macro econometric variables such as interest rates and unemployment index, to financial data related to the loans such as the housing pricing index, the borrower's credit history, the residentialproperties that back the loans and the loans' historical performance.

The talk will try to explain

- the thinking process for identifying the principal factors
- the basic approaches used to quantify their relationship to the performance
- the validation of the models

There are numerous ways for quantification. Traditional statistics are no longer adequate. Various machine learning techniques might have become practically applicable. One of the objectives of the talk is to explain the typical modeling issues and interested parties can follow up with the speaker on potential try-outs of the modeling work with those advanced tools.