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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.”

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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.

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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.