Mortgage Capital Trading, Inc. (MCT), a hedge advisory firm and developer of MCTlive!, a secondary marketing software suite, announced that it has added a number of new features to its best execution service offering. The enhancements were done to position MCT to capture additional business among lenders. Here’s how:
“We already enjoy great a deal of ongoing success with our existing best execution model, but the new features we developed in collaboration with our new MSR Services business unit significantly widens opportunity for MCT,” says Curtis Richins, president of MCT. “Unlike most hedge advisory firms, MCT has always focused on maximizing loan sales value through a robust best execution analysis that considers a wide range of execution options such as mandatory, AOT, bulk, Agency, co-issue, etc. Our deep secondary marketing expertise and long-standing focus in this area really gives us a strong advantage that outpaces the competition and takes best execution analysis to the next level.”
The enhanced tool is an extension of MCT’s existing best execution methodology, which is traditionally offered with its proprietary hedging services. The option to leverage the new feature set is ideal for lender clients that are interested in deepening their retain/release decisioning process and cash management concerns. It offers additional dimensions of time to payback, cash drain, corporate tax structure, subservicing terms and MSR financing possibilities, which are not available in other best execution models.
“Lenders, especially non-bank mortgage companies, need to be acutely aware of their cash needs and balance sheet liquidity in addition to getting the best economics out of a loan sale,” said Phillip Laren, director of MSR Services at MCT. “The enhanced best execution tool provides analytics to compute cash loss after adjusting for tax impact, months to breakeven, and any lift through MSR financing. It’s unique in that it analyzes servicing options not just from a secondary marketing perspective, but also from the financial management side of the business by considering cash spent to retain and when it may eventually be recovered.”
The model is completely customizable to actual sub-servicer costs, tax structures, and financing terms. “What if” scenarios can be set to run different scenarios to empower a CFO and secondary trader with data to determine the best decision based on economics, cash, balance sheet, and tax optimization concerns.
The enhanced best execution solution works in conjunction with MCT’s proprietary HALO hedging and loan sale program and with its award-wining capital markets platform MCTlive!
MCT formed its MSR Services Group last year after acquiring the assets of PLar Analytics, LLC and PB Pacific Partners, LLC. MCT brought on board founder Phillip Laren to head the company’s new MSR Services Group. The deal significantly added to MCT’s value proposition by expanding its advisory services to include specialization in mortgage servicing rights valuation.