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And The 2018 Winners Are …

Prominent mortgage executives gathered to see who the Executive Team of PROGRESS in Lending named the top industry innovations of the past year at the Eighth Annual Innovations Awards Event. This honor is the Gold Seal when it comes to recognizing true industry innovation. All applications were scored on a weighted scale. We looked for the innovation’s overall industry significance, the originality of the innovation, the positive change the innovation made possible, the intangible efficiencies gained as a result of the innovation, and the hard cost and time savings that the innovation enables industry participants to achieve. The top innovations winners are:

Lodasoft

PROGRESS in Lending has named Lodasoft a top industry innovation. To address the CFPB requirements of improving the borrower experience, the first big wave of innovation has come out of Silicon Valley. Hundreds of millions of dollars have been invested in the consumer facing aspect of the borrower application. The term “digital mortgage” has been coined and a flood of shinny new mortgage websites and apps have been created to deliver borrowers an Amazon type borrower experience. However, the majority of dollars invested, have focused almost solely on the online application for borrowers. The problem is that mortgage lending is significantly more complicated than just a shinny new app. The right digital mortgage platform helps to drastically reduce the chaos in daily lending processes while improving communication to help lenders close more loans faster. Therefore, in 2017 Lodasoft introduced its truly innovative “Digital Mortgage Platform” featuring Intelligent Loan Manufacturing to address these industry challenges head on.

Capsilon

PROGRESS in Lending has named Capsilon a top industry innovation. A truly innovative mortgage process means more than borrower-friendly loan selection and document submission, it is an end-to-end solution that keeps all stakeholders in the loop throughout the process. In 2017, Capsilon introduced Point of Sale Portals (POS), enabling the creation and delivery of quality loan packages that streamline every process step from application to closing. Capsilon’s POS Portals are powered by Intelligent Process Automation to supercharge loan production from intake to delivery of complete and compliant loan packages. This is an industry first, dramatically improving loan quality and speed, while drastically reducing production costs. Lenders are pressed to meet the challenges of production, compliance and profitability, as well as soaring borrower expectations. Instead of simply streamlining the traditional loan process, in 2017, Capsilon launched Point of Sale Portals that are fully integrated with its patented back-end technology to deliver on the promise of a true digital mortgage.

WebMax

PROGRESS in Lending has named WebMax a top industry innovation. According to Inc. Magazine, Millennials make up 66% of first-time homebuyers and 66% of them plan to buy a home in the next 5 years. Moreover, the same report found that Millennials associate home ownership with the American Dream more than any other generational demographic. The October 2017 composite forecast of Fannie Mae, Freddie Mac, and the Mortgage Bankers Association for 2017 mortgage origination volume is approximately $1.8 trillion. If Millennials compose 50% of this mortgage volume, and two-thirds of them apply online via digital applications, that represents $600 billion in digital mortgage origination. This number is massive. Better yet, it’s conservative. Millennials expect mobile-responsive mortgage lending sites and applications with a responsive layout from their potential lender. They want their mortgage application to be as easy as buying a t-shirt from an online retailer. Therefore, WebMax developed its innovative point-of-sale solution in 2017, called START, to not only meet the demands of borrowers, but to exceed their expectations and revolutionize the entire process. With START, WebMax provides a single location for the loan to exist for both the borrower and loan officer. There’s no shifting documents back and forth or waiting for verifications. START’s integrations to mission-critical third parties allows for the technology to do the work, streamlining workflows, reducing costs, and minimizing frustration.

Paradatec

PROGRESS in Lending has named Paradatec a top industry innovation. Other OCR solutions typically expect relevant data points to consistently appear in the same locations (or ‘zones’) on a document. If the data shifts due to changes in layout (again, think of bank statements), the zone-based approach will fail unless another layout template is created, making for a greater administrative burden with these solutions. A high volume, scalable OCR automation initiative requires the flexibility of Paradatec’s Advanced Mortgage OCR solution to process an unlimited number of document layouts without needing to develop specific templates for each layout variation. This capability is unique to Paradatec and a vital feature for creating an effective unstructured document classification and data capture solution. Paradatec’s Advanced Mortgage OCR solution is designed to make mortgage lending faster and more accurate. In 2017, Paradatec’s Mortgage OCR solution processed over 1,500,000,000 images (representing over 2,500,000 loans), helping lenders and servicers streamline their onboarding and compliance obligations.

Asurity Technologies

PROGRESS in Lending has named Asurity Technologies a top industry innovation. In 2017, MRGDocs was acquired by Asurity Technologies and introduced MRGDocs’ cloud-based platform which revolutionized the security of its dynamic document generation software featuring a secure system infrastructure to increase the protection of consumer data and deliver safer, faster, and more user-friendly systems while maintaining the content and support quality that has long been the hallmark of MRGDocs’ services and document packages. This solves for several mortgage industry challenges: the costs to secure big data, protecting the myriad of personal identification information collected, and managing compliance through a hyper secure platform. In 2017, MRGDocs built a comprehensive data security capability on a robust foundation that allows for the type of growth and expansion needed to serve even the largest of financial institutions, implementing a hyper-converged, virtual server platform with 24/7 SIEM-managed security monitoring.

STRATMOR Group

PROGRESS in Lending has named STRATMOR Group a top industry innovation. MortgageSAT is an online customer satisfaction measurement program that allows consumers to provide direct feedback on their satisfaction with the mortgage process, and provides lenders actionable insights from the results, all available via an online portal. Put simply, it’s Business Intelligence based on consumer insights. Why did STRATMOR create MortgageSAT? For many years, mortgage lenders have struggled to capture actionable feedback from borrowers by means of post-closing email or closing-table-completed surveys. By means of its powerful borrower satisfaction management tool called MortgageSAT, developed in partnership with the CFI Group, STRATMOR has led the way to fundamental change the way lenders manage and apply borrower feedback. MortgageSAT is the first and only borrower satisfaction monitoring tool to score satisfaction at all levels of the organization as regards retail, consumer direct and broker production. As a consequence, many MortgageSAT clients tie their employee reviews and, in some cases, compensation both to these scores and a review of borrower comments. When everyone’s performance review includes a measure of their contribution to borrower satisfaction, a borrower-centric culture is fostered that is aligned with the emerging competitive paradigm of “optimizing the borrower experience.”

Maxwell

PROGRESS in Lending has named Maxwell at top industry innovation. No matter how digital the process, every mortgage is saddled with documents and data, over 500 pages, according to the Mortgage Bankers Association. As a result, an average of 20 days during the mortgage process is consumed by the search, preparation and review of those documents. Maxwell, the leading digital mortgage solution for small and midsize lenders, removes this friction with its platform. Sitting as the digital interface between the lender and their borrowers, Maxwell manages collaboration through the loan process, significantly reducing cycle times and driving delight. Originating teams on Maxwell are able to focus on what they do best, advising and coaching clients through the largest transaction of their lives, while Maxwell’s technology handles the rest. As one head of production attested, “Maxwell allows us to focus on what we love: working with real people. While loans get done faster and my team is happier.”

PromonTech

PROGRESS in Lending has named PromonTech a top industry innovation. The Borrower Wallet is the first offering from Promontory MortgagePath’s technology arm. From a lender’s perspective, the Borrower Wallet captures leads and fosters borrower/lender collaboration to drive enterprise efficiency and improve loan pull-through. In addition, its built-in collaboration tools deliver high-quality data and documents needed to feed and accelerate the downstream underwriting process. As a white-label offering, the Borrower Wallet makes the latest technology accessible and affordable to mid-size and smaller lenders, enabling them to compete with mega lenders. PromonTech’s culture of mutual respect between “techies” and mortgage industry experts made it possible to create a mass-market POS where both consumer and lender needs are equally important. The Borrower Wallet is not the first digital POS, but it’s the first to engage consumers while anticipating lender needs in such a balanced way. It combines creative design, industry analysis and data governance to create a unique user experience.

MCTlive!

PROGRESS in Lending has named MCTlive! a top industry innovation. Over the past year, MCTlive! developed a major mortgage technology advancement with the addition of what the company branded its “Bulk Acquisition Manager” (BAM) solution, which is accessible via MCTlive! BAM is a Digital Loan Trading solution. BAM completely automates the process of packaging and transferring bulk loan bids, which benefits investors, lenders and MCT’s team of in-house mortgage loan traders. The result is a much quicker pricing process for bulk bid tapes, greater data security, better communication between counterparties, increased transparency for all parties, process consistency for investors within their existing platform, and centralization of data. BAM helps facilitate digitize loan trading on the secondary market. The effectiveness of the BAM technology has already gained 100% adoption by the ENTIRE investor community on the secondary market — across the board. And the level of transparency it offers between buyer and seller is hugely attractive and makes investors and lenders feel at ease.

Ellie Mae

PROGRESS in Lending has named the Ellie Mae Encompass NG Lending platform a top industry innovation. The Encompass NG Lending Platform allows lenders, service providers, and independent software vendors the ability to build custom applications in the cloud, integrate external systems and data, and extend Encompass in order to meet any and all industry challenges. Mortgage lenders and mortgage service providers can build, integrate, or customize solutions, and get them to their customers and market quickly. Lenders, partners, and third-party providers gain access to data and systems across the mortgage ecosystem. In the end, all participants can easily view and share loan date, sales pipeline, loan events, documents, and order services. A shared system of record allows all parties in the loan process to see the same up-to-to-date information in the same format. Everyone in the ecosystem can easily share, interact, and collaborate without having to create and support new channels.

 

 

Progress In Lending

The Place For Thought Leaders And Visionaries

Advancing Secondary Marketing

Lenders are rightfully taking a hard look at service and profitability. We talked to Chris Anderson, the Chief Administrative Officer of Mortgage Capital Trading, Inc. (MCT) about this very issue. Founded in 2001, Mortgage Capital Trading, Inc. (MCT) has grown from a boutique mortgage pipeline hedging firm into the industry’s leading provider of fully-integrated capital markets services and technology. MCT offers an array of best-in-class services and software covering mortgage pipeline hedging, best execution loan sales, outsourced lock desk solutions, MSR portfolio valuations, business intelligence analytics, mark to market services, and an award-winning comprehensive capital markets software platform called MCTlive! MCT supports independent mortgage bankers, depositories, credit unions, warehouse lenders, and correspondent investors of all sizes. Here’s what Chris Anderson told us:

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Q: MCT has traditionally been known as a hedge advisory firm but has successfully transitioned into a full-service integrated capital markets services and technology firm. Can you tell us a little about MCT’s genesis and where the company is at today?

CHRIS ANDERSON: MCT was founded in 2001 with the primary focus of helping mortgage bankers make the switch from selling loans at best efforts to the more profitable mandatory trading in the secondary market. A big part of our value proposition has always been using a business model that provides very hands-on, highly service-oriented secondary marketing support and guidance. We have the largest team of in-house traders and analysts in the industry to ensure excellent service and analytics. This is unique in the sense that each of our lender clients has a dedicated team of three traders and analysts to work with who support their hedging program. One differentiator that set MCT apart early on was our recognition of the importance of providing our clients support in very robust best execution analysis and loan sale commitments.

To complement our core services, we have developed into a fully-integrated capital markets services and technology firm with a broader product set to support our client base beyond hedging and best execution. We now offer an array of best-in-class services and software covering mortgage pipeline hedging, best execution loan sales, outsourced lock desk solutions, MSR portfolio valuations, business intelligence analytics, reporting, mark to market services, and an award-winning comprehensive capital markets software platform called MCTlive!  We support a number of different mortgage entities that range from independent mortgage bankers to depositories, credit unions, warehouse lenders, and correspondent investors of all sizes.

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Today we have a full-time staff of nearly 100 employees, most of which reside in our San Diego-based headquarters, with additional operations offices is in Philadelphia, Los Angeles, Santa Rosa and Dallas. We have consistently been listed on the Inc. 5000, Inc. 500 and San Diego’s fastest-growing private companies list, and each year we earn a spot on the Best Places to Work list. We see additional growth throughout 2018 and have a strategic plan and infrastructure in place to allow us to grow at a healthy, controlled rate that ensures our client service is always second-to-none.

Q: MCT launched its secondary market technology, MCTlive!, a few years back.  Can you tell us a little bit about it?

CHRIS ANDERSON: Absolutely. We have traditionally been known as a pipeline hedge firm, but over the years have worked hard to strategically transform into an advisory firm with an extensive set of integrated capital markets services and technology. About seven years ago, we recognized a growing need for more contemporary, robust, completely web-based secondary marketing software than what was currently available on the market. We invested in the necessary R&D and roughly five years ago we did a soft launch of the platform — MCTlive! — to our own client base.

Since the launch, adoption of MCTlive! has been wildly successful. We have mortgage bankers, depositories, credit unions and correspondents of all shapes and sizes leveraging it for daily advisory services, comprehensive reporting, live market color, and ongoing education to implement their hedging and execution strategies.

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Whereas the more traditional desktop-based software applications confine secondary market managers to their desks, MCTlive! is purely browser-based — through and through with no installs whatsoever. It can be accessed anytime, anywhere via a secure online interface. We have some clients that have actually executed trades while on airplanes traveling for business in mid-flight.  MCTlive! is delivered on a software-as-a-service (SaaS) basis and resides securely in the Cloud, thus avoiding the issues that accompany traditional on-premise systems.

From a usability perspective, our clients can leverage as much or as little of MCTlive! as they need for their specific business models and extent of secondary marketing experience.  Some may be “power users” while others may need a bit of hand-holding and coaching, which MCT is well-known for and extremely good at. We didn’t want secondary marketing departments having a ton of technology shoved down their throats all at once, which is one big issue with other secondary technologies that are out there. We don’t want clients drinking from a technology fire hose.  As such, we essentially make available a flexible ‘walk before you run’ model whereby lenders can increasingly use MCTlive! as they become more comfortable; or, they can dive right in and immediately start leveraging the entire platform. It’s really what’s best for their secondary marketing department. And, we’re always there to help them.

The addition of MCTlive! takes our business services offering a step further by empowering lenders with real-time online tools, automation, analytics and reporting that gives them enhanced visibility and control over their secondary marketing functions.

Q: When it comes to secondary marketing technology, what do you think the industry could be doing differently to better serve lenders?

CHRIS ANDERSON: This is a great question. One of the things that the industry needs to improve on with secondary marketing technology is being through and through web-based. Many of the systems out there right now require some sort of an install. Put simply, secondary marketing software needs to become more contemporary. Much of what’s out there is dated.

Also, data must be refreshed as frequently as possible. We board clients that have worked with other firms that are still uploading data once or twice per day, or are using systems that can take 45-90 minutes to run a simple hedge position. In volatile markets, this leaves clients with unnecessary market risk.

When a platform needs to be installed, there is of course maintenance that is required by the lender, thus increasing total cost of ownership (TCO).  In some cases, it may require internal IT resources to help manage. Further, the systems need to be more user-friendly.  Some of the models are basically, ‘You own it and you manage it. Good luck.’ These on-premise installs can be tough to work with, especially for a lender that does not have a large secondary marketing department.

When we developed MCTlive!, we made sure it was completely browser-based and delivered on a SaaS basis.  The example that I mentioned earlier where some MCT clients executed trades while on a plane in mid-flight would not be possible with older platforms.  Also, some of our clients are using MCTlive! as a capital markets core system-of-record that also includes business-critical analytics and reporting, which is quickly changing the game. We are starting to see some overhauls of existing systems, but they still have a long way to go. Rome wasn’t built in a day.

In addition, we provide a dedicated team of high-value employees to oversee each and every new hedge client, and we try to do as much of the heavy lifting for our clients as possible. For example, despite my many responsibilities, I am still personally involved with every new client that boards to ensure that we do everything we can to prepare our clients up for a smooth, successful transition. We saw a void in the marketplace, one that lacked a solid marriage between technology and people. The industry could be doing a better job of being more hands-on with traders to work with lenders and the technology to support them.

Q: Mortgage loan trading is starting to go digital.  Where is the industry at today and where do you see it going?

CHRIS ANDERSON: Obviously, on the origination front, the point-of-sale is quickly being automated with borrowers not having to provide paper docs and scans.  Being able to automatically pull things like Verification of Employment (VOE), Verification of Income (VOI), Verification of Assets (VOA), access to the IRS, eSigning capability, etc. is saving a lot of time and enhancing the borrower experience while reducing costs.  In the back-office, eClosings are gaining momentum, too.

In our capital markets world, however, the mortgage industry is rather slow to catch up to the age of digital loan trading and business transactions. But over the next 12-18 months we are expecting to see a continued trend in the adoption of digital mortgage loan trading tools. As an example, bid tape transfer platforms for the investor community, which automate the acquisition of tapes from lenders, has really started to gain quick adoption.

Right now lots of lenders are using manual delivery methods and are likely leaving some profits on the table. But we’re moving toward enhanced automation and real-time trading activity across the board for the entire secondary marketing process. What really matters most is how it is executed. Automation brings more granularity with price, more robust best execution, greater transparency, and optimized trading for both buyers and sellers via sophisticated transaction management platforms.

Also, we’re seeing traditional rate sheets changing as the mortgage industry becomes more digitized.  Currently, bidding transpires at the tail end of the mortgage manufacturing process. Digitizing this will move the pricing and knowledge about spec pay-ups to the point of origination, thus reducing the need for traditional rate sheets.

Q: What are some of the challenges when lenders make the switch from best efforts to mandatory loan trading commitments?

CHRIS ANDERSON: The biggest challenge for lenders is finding the right firm to work with in their transition. There are changes in underwriting, workflows, technology configurations, and accounting processes, as well as ensuring that there are proper third party relationships with broker dealers and investors.

These shifts can seem overwhelming to a lender if they don’t partner with the right firm for their unique business needs. At MCT, we have invested in significant staffing resources to ensure that we are armed to assist lenders in this transition. We pride ourselves on our educational approach to assisting clients. We make it a priority to recruit business development and implementation staff that have deep expertise in capital markets and have actually sat in the seat that our clients do when they make the transition.

Q: How important are integrations to a lender’s secondary marketing technology?

CHRIS ANDERSON: As we know, on so many levels in the mortgage industry, it’s all about the data. It needs to be clean, accurate, and integrated.   Keeping your data in order and being in complete control over it is paramount to the digitization of whole loan trading and better hedging.  Having tight, bi-directional integrations between the pricing engine at the point-of-sale to the LOS in the back-office, and ultimately the secondary platform is vital to ensuring data integrity, compliance, profitability, and effective risk management.  Sure, good system-to-system integrations always help eliminate manual intervention, reduce costs, decrease errors, speed up processes, etc., but moreover, when using a hedging strategy, integrations are a path to achieve better hedging and greater profitability. It’s the real-time exchange of loan data that ends up creating more profitable loan sales to investors.

At MCT, we recognized the need to proactively develop integrations with leading LOS platforms. We introduced our first direct LOS integration in 2010 and have been steadily adding them ever since, and we now boast integrations with all leading platforms.

INDUSTRY PREDICTIONS

Chris Anderson thinks:

1.) The secondary marketing trend we’ve seen over the past few years will continue, with bulk bid tapes as the increasingly dominant delivery channel for whole loans to investors.

2.) Technology automation such as data write-backs will become more prevalent as the mortgage industry recognizes the need to embrace technology and leverage it to reduce manual errors and save labor costs.

3.) As rates continue to rise, we will begin to see a significant increase in non-QM loan volume, and we’ll again be in a purchase market, forcing lenders to shift their marketing strategies.

INSIDER PROFILE

Chris Anderson is Chief Administrative Officer at Mortgage Capital Trading, Inc. (MCT) where he currently oversees the company’s Lock Desk Division, IT & Programming Division, and Business Operations Division that includes Administrative Operations, Compliance, Human Resources, and Risk Management. He has management experience in both the private and public sectors with expertise in regulatory compliance, organizational development, project management, data systems management, professional development, and public policy analysis. Notable is that in 2013 Chris successfully grew MCT’s Lock Desk Division and established it as the industry standard for outsourced lock desk services.

Progress In Lending

The Place For Thought Leaders And Visionaries

MCT Bolsters Its Presence With New CMO

Mortgage Capital Trading, Inc. (MCT), a mortgage hedge advisory and secondary marketing software firm, announced that Ian Miller has joined the company as Chief Marketing Officer (CMO). In this newly created position, he is responsible for ensuring that MCT’s marketing strategy effectively supports the company’s business plan and helps drive growth.

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MCT has traditionally been known in the mortgage industry as a pipeline hedge firm but over the years has developed into a fully-integrated provider of capital markets services and software. Mr. Miller is charged with developing and executing MCT’s marketing plan and strategic initiatives.  Since joining MCT, he has made significant strides in honing the company’s messaging, positioning, branding and creating positive industry awareness for MCT’s value proposition and extensive suite of secondary marketing focused products and services.

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“We are elated to have been able to recruit Ian to join the MCT team and head the marketing strategy,” said Curtis Richins, president of MCT. “We’ve grown our business considerably over the past several years and had a need to ensure that our brand accurately reflects the robust suite of products, services, and technology we now offer within company divisions. Ian has and will continue to play a key role in making sure MCT maintains a strong reputation in the mortgage industry.”

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Before MCT, Mr. Miller served as the Director of Client Services at Riverine, Inc., a full-service digital marketing firm catering to over 50 clients in a wide range of industries and capacities. At Riverine, he worked closely with MCT as a vendor partner where he was instrumental in streamlining the integration of its sales and marketing processes and enhancing the brand.

Prior to Riverine, Mr. Miller was a co-founder and partner at Tower Agency, a digital marketing firm offering end-to-end marketing capabilities. Mr. Miller eventually merged the company with Riverine, growing the client base exponentially. Before that, he was a freelance marketing agent providing professional services to an array of clients.

“Serving as MCT’s marketing provider in recent years, I have been impressed by their culture, dedication to customer service, and continuous innovation,” said Mr. Miller. “I’m grateful for the opportunity to help these qualities reach a wider audience, and support MCT’s growth as the leading provider of capital markets services and software.”

Mr. Miller is a through and through marketing professional who has a proven track record of successful execution with growing brands, capturing market share and increasing revenues. He is well-versed in all aspects of marketing communications ranging from strategic planning, branding, advertising, content marketing, and social media to trade shows, event production, sales support and client communication. He will leverage these competencies, along with support from a team of experienced professionals, to execute on a robust marketing strategy for MCT in 2018 and beyond.

Progress In Lending

The Place For Thought Leaders And Visionaries

Integration Offers Intelligent Best Execution Capability For Fannie Mae Sellers

Mortgage Capital Trading, Inc. (MCT), a mortgage hedge advisory and secondary marketing software firm, has released a new online functionality that automates the process of product selection and delivery of loan commitments directly to Fannie Mae for MCT’s lender clients. The new solution, which was developed as part of MCT’s ongoing technology collaboration with Fannie Mae, is called Rapid Commit and resides within MCT’s secondary marketing platform, MCTlive!.

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Fannie Mae’s Pricing & Execution – Whole Loan (PE – Whole Loan) application is a whole loan committing platform, providing ease of use, flexibility and certainty for sellers. Rapid Commit functionality retrieves pricing directly into MCTlive!, which in turn speeds up the committing process, ensures data integrity, and optimizes best execution for all commitments.

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“We developed Rapid Commit to make our customers’ entire loan commitment process with Fannie Mae more efficient, providing automated, highly accurate best execution analysis that is instant and robust,” stated Phil Rasori, COO of MCT. “Working within MCTlive!, users leverage Rapid Commit to run initial best execution and determine that the loan meets Fannie Mae selling guidelines, followed by product-specific best execution that intelligently analyzes the optimal subset sizes and products to deliver as individual commitments.”

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Last year MCT announced a new integration with Fannie Mae’s technology that delivered real-time pricing from MCTlive! for the benefit of mutual lender clients. Rapid Commit further strengthens MCT’s collaboration with Fannie Mae and advances the integration of their complementary technologies.

Mr. Rasori added, “Rapid Commit enables a Fannie Mae specific best execution within MCT’s overall robust best execution process via a bi-directional exchange of real-time data that is completely automated between MCTlive! and Fannie’s Pricing & Execution – Whole Loan web-based application. Previously, this analysis was a manual, laborious process but it is now completely automated – all with the simple click of a button. We look forward to working closely with Fannie Mae on business and technology initiatives.”

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Technology Achieves 100 Percent Investor Adoption

Mortgage Capital Trading, Inc. (MCT), a leading mortgage hedge advisory and secondary marketing software firm, announced that it has gained unprecedented industry-wide technology adoption among the investor aggregator community. MCT officially unveiled the Bulk Acquisition Manager (BAM) within its capital markets software platform, MCTlive!, in July of this year.

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BAM centralizes and streamlines the entire process of packaging and securely transferring whole loan information and bids. The technology provides a web interface that enables lenders’ bid tapes to be securely and efficiently delivered to approved buyers following best execution analysis in a centralized repository. Investors are lauding BAM as the most robust, easy-to-use, scalable, and secure bid tape management technology on the market, which are cited as the primary reasons for rapid investor adoption.

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“We initially developed BAM to address the Nonpublic Personal Information (NPI) security risk associated with transmission of bulk bid tapes via email, but the efficiency gains and improved market color for both counterparties drove rapid adoption,” said Phil Rasori, COO of MCT and architect of BAM. “MCT represents 30 to 40 percent of approved sellers for the average correspondent investor with about 1,200 bid tapes flowing through BAM every day. BAM is raising the bar for other bid tape management solutions, with one major investor already leveraging BAM to serve as their database of record for bulk bid tape transactions. BAM is well on its way to becoming the defacto standard in the mortgage industry.”

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BAM includes tiered user administration, putting decision-making about access to transaction data in the hands of lender clients and their investors. Overall, BAM is improving the industry’s existing loan sale practices with quicker best execution pricing for bulk bid tapes, better communication and transparency, enhanced data security, greater organization and consistency, endless scalability, and optimization of the entire process from start to finish.

To make BAM’s functionality conveniently integrate with existing processes, MCT established two different methods for investors to securely transmit bid tape files. This can be done by accessing MCTlive!’s secure browser-based user interface or via a Restful API (Application Programming Interface) which enables MCT to integrate with various loan exchange platforms and homegrown investor systems. To date, nearly all investors have elected to use MCTlive! due to its extreme ease of use, built-in metrics, and robust user administration.

Company officials at MCT say that plans are in progress to expand BAM and its user base, yielding even more improvements to management of the bid tape transfer process. Moving forward, investors, lenders, traders, account executives, and the bid tape market as a whole will realize additional benefits through feature development within MCTlive! and the Bulk Acquisition Manager.

About The Author

Tony Garritano

Tony Garritano is chairman and founder at PROGRESS in Lending Association. As a speaker Tony has worked hard to inform executives about how technology should be a tool used to further business objectives. For over 10 years he has worked as a journalist, researcher and speaker in the mortgage technology space. Starting this association was the next step for someone like Tony, who has dedicated his career to providing mortgage executives with the information needed to make informed technology decisions. He can be reached via e-mail at tony@progressinlending.com.

New Integration To Optimize Loan Hedge Positions For Lenders

OpenClose an enterprise-class, multi-channel loan origination system (LOS) provider, and Mortgage Capital Trading, Inc. (MCT), a mortgage hedge advisory and secondary marketing technology firm, have developed an integration that eliminates manual intervention and streamlines the delivery of loan data to maximize hedging for lenders.

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The integration works by automatically taking loan-level details that are originated and locked in OpenClose’s LenderAssist™ LOS and then securely passing them directly to MCT to hedge. The entire process of obtaining critical data becomes very easy, with updates occurring every 15 minutes. This removes several steps in the data acquisition process, saving time, reducing errors and providing faster reporting.

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“We worked diligently with the team at OpenClose to develop this connectivity between their LOS and our proprietary HALO hedging model, which now facilitates a much smoother, quicker way for us to obtain locked loan information from our mutual customers,” said Chris Anderson, chief administrative officer at MCT. “We are continuing to expand our integration partner network in order to provide the best service and support for our lender clients. Over the past few years, MCT has significantly expanded our business services with technology being a key area, especially with the adoption of our web-based secondary marketing platform, MCTlive!

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The longer lenders are exposed to interest rate movements the more prone they are to have locked loans without hedge positions. As a result of the integration, MCT is able to hedge more frequently as opposed to having the lender manually send pipeline reports to them. The automatic updates are performed every 15 minutes which provides a tangible reduction in risk by shortening the time period between rate locks and hedge positions.

As it relates to lenders, there isn’t anything that they have to do to enable the new integration. MCT performs the heavy lifting and all parties benefit from the resulting efficiencies gained. OpenClose and MCT worked closely together from a technology perspective to streamline the process.

“This integration saves my staff valuable time and transfers our data quickly and securely, ensuring that my hedge positions are always optimized,” says Dan Beam, senior vice president of capital markets at Firstrust Bank. “Both OpenClose and MCT are forward-thinking companies that recognize the importance of investing in enhancements like this for the benefit of lenders.”

“A key common thread between our organizations is an unwavering commitment to always provide excellence in customer support,” said Vince Furey, senior vice president of lending solutions at OpenClose. “We are also like-minded in that we are both very selective about the organizations we partner with.  OpenClose is pleased to expand our technology relationship with MCT.”

Progress In Lending

The Place For Thought Leaders And Visionaries

MCT Further Automates Secondary Marketing

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:

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“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.”

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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.

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“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.

Progress In Lending

The Place For Thought Leaders And Visionaries

OpenClose And MCT Streamline The Loan Sale And Purchase Advice Process

OpenClose an enterprise-class, multi-channel loan origination system (LOS) provider, announced that in conjunction with Mortgage Capital Trading, Inc. (MCT) it has developed a solution that normalizes and extracts a lender’s committed loan sale and purchase advice data to be uploaded directly into OpenClose’s LenderAssist LOS, thus eliminating significant manual intervention.  Depending on the number of loans that have been executed, time savings can be reduced from days to minutes.

“We use MCT as our secondary marketing advisory firm and OpenClose as our LOS provider. The solution they jointly developed empowers us with an invaluable tool to slash the amount of time it used to take us to rekey committed loan data and purchase advice information from Fannie Mae,” stated Dan Beam, senior vice president of capital markets at Firstrust Bank. “Given the number of trades we are doing in a particular week, the automation of this process can easily shave off what previously required dozens of man hours down to just minutes.”

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The solution works by MCT converting large committed loan sale reports or purchase advices into normalized datasets, which is then automatically transmitted to the lender for easy upload into OpenClose’s LenderAssist™ LOS.  All of this transpires with the simple click of a button.

“We want to do whatever we can to make our customers’ jobs as easy as possible and this new capability delivers a tremendous uptick in efficiency, saving secondary marketing departments inordinate amounts of time which in turn reduces costs,” says JP Kelly, president of OpenClose.  “Whether our mutual customers upload a few dozen loans at once or hundreds of loans, it takes a fraction of the time it used to.”

“MCT is committed to providing innovative solutions with our technology partners that enable work efficiencies and cost savings for our mutual clients. This interface delivers on that promise,” says Chris Anderson, chief administration officer at MCT.

Progress In Lending

The Place For Thought Leaders And Visionaries

Streamlining Secondary Marketing

LendingQB, a SaaS LOS solutions provider for the mortgage lending industry, announced that it has completed an enhanced interface to Mortgage Capital Trading (MCT), a recognized industry leader in capital markets management and advisory services. The enhanced interface automatically updates investor commitments performed by MCT directly into the LendingQB LOS, saving lenders time and increasing their operational profitability.

In 2013, LendingQB first released an interface to MCT’s HALO-Link, which automatically transferred loan pricing and pipeline data from the LendingQB LOS to MCT in order to improve the accuracy of hedge positions. Today, the two companies completed an enhancement to the HALO-Link interface that adds the capability for MCT to update the LendingQB LOS in real-time with key investor information, such as confirmation number, confirmation price and expiration date. The result is a comprehensive and efficient secondary marketing process that provides pricing and hedge risk transparency throughout the mortgage loan life cycle.

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“The enhanced HALO-Link interface with LendingQB is groundbreaking because we can now interact with our clients seamlessly in both directions,” said Chris Anderson, chief administrative officer at MCT. “On the hedge side, LendingQB gives us visibility into a lender’s pipeline so that we know exactly how much coverage they need to have. On the commitment side, we can push investor data right into LendingQB, saving hours of labor and ensuring complete accuracy on loan delivery.”

A key component of the LendingQB LOS solution is their Universal Decision Engine (UDE), an automated underwriting and pricing engine that manages the entire secondary marketing process from initial pricing through capital markets. Combining the technology of LendingQB’s UDE with MCT’s services provides lenders with a powerful and comprehensive solution that:

  • Accurately qualifies borrowers for loan products using raw credit report data and robust investor guidelines
  • Accurately prices loans with automatic calculation of investor and custom pricing adjustments
  • Delivers loan pipeline data in real-time to MCT for timely and efficient pipeline hedging
  • Uploads investor commitment data to LendingQB for timely and efficient delivery of loan commitments

Open Mortgage, a lender based in Austin, Texas, was selected as the first mortgage lender to use the enhanced interface and noted a significant improvement to their secondary marketing. “The total solution provided by MCT and LendingQB is more than just a time saver,” said Nick Whitten, senior director of secondary marketing at Open Mortgage. “I now have one system that simplifies all of my secondary marketing tasks from rate lock to investor delivery. The real benefit for me is that MCT and LendingQB have come up with an extremely efficient process that makes my locks safer and more profitable. It has a tangible impact that is felt throughout all of Open Mortgage.”

“We are very pleased to have a partner like MCT,” said Binh Dang, president of LendingQB. “They share our vision of making lenders more profitable by focusing on processes instead of just the end result. It’s through this type of authentic collaboration that we’re able to create solutions that have a lasting and powerful impact on lenders.”

About The Author

Tony Garritano

Tony Garritano is chairman and founder at PROGRESS in Lending Association. As a speaker Tony has worked hard to inform executives about how technology should be a tool used to further business objectives. For over 10 years he has worked as a journalist, researcher and speaker in the mortgage technology space. Starting this association was the next step for someone like Tony, who has dedicated his career to providing mortgage executives with the information needed to make informed technology decisions. He can be reached via e-mail at tony@progressinlending.com.

Risk Management Firm Completes Two Acquisitions

MCT Trading, Inc. (MCT), a provider of mortgage risk management pipeline hedging, best-execution loan sales and centralized lock desk services, has acquired certain key assets of PLar Analytics, LLC, a provider of financial models for mortgage bankers, and of PB Pacific Partners, LLC, which offers consulting services on capital markets and mortgage servicing.

The deal expands MCT’s advisory services to include specialization in mortgage servicing rights (MSR) valuation business.  This new MSR Services Group will be headed by Phil Laren, founder of PLar Analytics and PB Pacific Partners.  MCT’s acquisition includes certain key assets of PLar Analytics’, PB Pacific Partner’s customer base and its proprietary Enhanced Servicing Model (ESM).  Mr. Laren is now a full-time employee at MCT.

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“This deal is a natural fit for MCT.  We have been utilizing the ESM model for over two years; it has multiple advantages over other valuation models,” stated Curtis Richins, president of MCT. “With Phil Laren running our new MSR Services Group, we have expanded our service offerings, enabling us to deliver even more tangible value to our lender clients.”

MCT clients will benefit immediately as a result of the acquisition with more granular analysis of the “retained” vs. “released best execution” decision-making process and access to the “best-in-class” MSR pipeline valuation services. MCT also intends to integrate PLar Analytics’ ESM and MSR software with MCTlive!, its award-winning secondary marketing technology platform for real-time trading, analytics and best-execution.

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“Given Mr. Laren’s extensive capital markets experience and industry-leading knowledge of MSR valuation, he is well-equipped to effectively assist MCT’s clients strategically and operationally as they evaluate retained execution opportunities,” said Phil Rasori, COO at MCT.  “He created a very sophisticated, proven valuation model.  Our clients are looking to MCT for advice in selecting the best servicing partners and then implement best practices, which strengthens our value proposition for lenders.”

“I am extremely excited to join the team at MCT and look forward to growing the MSR Services Group,” said Laren.  “Many lenders need specialized guidance in an effort to accurately value their servicing portfolios to maximize profitability and manage risk.  They will need help in evaluation potential new partners, such as sub-servicers. The new group that we’re establishing will be key in supporting existing MCT clients as they grow and in penetrating larger accounts.”

Terms of the deal were not disclosed.

About The Author

[author_bio]

Tony Garritano

Tony Garritano is chairman and founder at PROGRESS in Lending Association. As a speaker Tony has worked hard to inform executives about how technology should be a tool used to further business objectives. For over 10 years he has worked as a journalist, researcher and speaker in the mortgage technology space. Starting this association was the next step for someone like Tony, who has dedicated his career to providing mortgage executives with the information needed to make informed technology decisions. He can be reached via e-mail at tony@progressinlending.com.