We recently had the chance to talk with Genesis Collins, Vice President of Capital Markets at Alpha Mortgage, who is leveraging MCT’s Hedge Advisory services and BAM Marketplace technology to maximize the success of his loan sales.
Alpha Mortgage of Wilmington, North Carolina, provide a very personal touch to the mortgage lending process, specializing in providing competitive rates to military and veteran customers. Mr. Collins’ leverages BAM Marketplace in his daily best execution while delivering mandatory and has seen enormous improvement in time saved, efficiency gained, and increased pickup.
In this case study, Mr. Collins describes how MCT’s BAM Marketplace enabled him to decrease his average approval times with buyers and achieve an impressive pickup on committed loan volume while delivering via mandatory executions. His use of MCT’s software has also allowed Alpha Mortgage to have an edge over the competition, finding necessary outlets and adding additional investors when industry challenges have forced Alpha to pivot their strategy, such as when the agencies capped second home mortgages and investment property mortgage at 7% of total deliveries per lender.
VP, Capital Markets at Alpha Mortgage
Mr. Collins began working at Alpha Mortgage shortly after the company transitioned from Best Efforts to Mandatory Loan Sales with the support of MCT’s hedge advisory services. By leveraging MCT’s BAM Marketplace technology, he was able to improve upon Alpha Mortgage’s data integrity and optimize his best execution strategy.
Featured Quote: “We used BAM Marketplace to find additional investors. Had I not had BAM Marketplace, we would have been holding onto a few million dollars in funded loans and I might not have this job to be telling the story to you now.”
How MCT Adds Efficiency Through Technology
Shortly after Alpha Mortgage joined with the MCT service team to transition to mandatory loan sales, MCT equipped Alpha with BAM Marketplace, the world’s first truly open loan exchange. Alpha was one of the first lenders to reap the competitive benefits of this revolutionary new software.
BAM Marketplace – During 2020 market volatility, investors bought less, and sellers ran into liquidity issues, especially for key loan types such as low-FICO government. To help clients through this time, BAM Marketplace was created to connect distressed sellers with would-be buyers, particularly agency-approved lenders within the MCT client base without previous correspondent investing experience. The platform now welcomes new participants as the world’s first truly open loan exchange, where every loan can be priced by every investor regardless of approval status.
MCT Hedge Advisory Services – Technology and service to help lenders achieve their goals such as making the move to mandatory executions or seeking improvements to your mortgage pipeline management process. Lenders of every size trust MCT to manage risk and optimize profitability in their mortgage pipeline.
MCTlive! –A comprehensive capital markets platform used for day-to-day loan pipeline management, trade positions management, and loan sale best execution. MCTlive! automates repetitive tasks and frees your time for other high-value functions.
Contact us for a sneak peek at the technology leveraged by Alpha Mortgage.
Case Study Benefits Summary: Alpha Mortgage
BAM Marketplace, MCTlive! and MCT’s Hedge Advisory services are helping Alpha Mortgage improve their best execution strategy while boosting efficiency in their loan sale process. MCT also works closely with Mr. Collins to ensure his experience with the technology meets the goals of the company.
In this section, we will highlight the most impactful experiences for Collins and Alpha:
Lift Over Best Efforts
“We started running the data in September and we have been seeing a 100-120 basis points improvement.”
BPS Improvement over BE
BAM Marketplace Production
“From when we began using BAM Marketplace, I can determine that we have 8% of our production committed to BAM Marketplace buyers year-to-date.”
Production Committed to BAM Marketplace Buyers YTD
BAM Marketplace Pickup
“Out of that committed loan volume we have an average pickup of 30 basis points over the cover bid.”
BPS Average Pickup Over Cover
Reduced Approval Times
“Our average approval time with investors used to be up to 2 weeks, but with BAM Marketplace buyers our average approval time has been 3 days!”
Days Average Approval Time
“The functionality allows me to commit large quantities of loans and best ex them in a timely and efficient manner to where I generally sell 30-50% of daily production at the same time we’re pulling pricing for our internal rate sheets. To be able to do that knowing that my guys are doing pricing and I’m selling at the same time is critical.”
“MCT has the most experienced secondary people than any company I’ve done business with. I’ve found it’s run by all secondary people that know what secondary people need and they get their technology people to make it happen. I was up and running within an hour – not even. As quick as I could read the emails. Ok it works! I was just amazed at the speed.”
“Always having accuracy in your execution is key to profitability. I’m sure Joel or Paul would attest, I can be somewhat of a bear because I double and triple check everything to make sure the executions are correct. For me to get a good comfort level with something is saying a lot and I’ve got a good comfort level with MCT’s best ex.”
“He (Paul Yarbrough, MCT) gave me the step-by-step screenshots to get it set up, and I was done. It was so easy and the efficiencies were immediately there.”
Full Interview: Alpha Mortgage Gains an Edge Over the Competition with BAM Marketplace
Read our question / answer style format with the full responses from our conversations with Genesis Collins.
- When did you get started with BAM Marketplace?
- How frequently do you use BAM Marketplace and in what ways?
- What features of BAM Marketplace do you find the most useful?
- Is there any quantifiable monetary pickup gained by using this technology? How do you feel that the BAM Marketplace has saved you time in efficiency gains?
- What were some of the problems you were able to overcome with BAM Marketplace?
- How do you feel BAM Marketplace has given you an edge over the competition?
- Are there any lessons or best practices that you would like to share with other as you have been using this platform for a few months now?
- What has your overall lift over best efforts been thus far in basis points?
- How do you feel that MCT’s technology has helped you reduce risk?
- What’s it like working with MCT from a client service perspective?
- What are your growth plans as a company, or as a capital markets professional? Do you see MCT supporting you in realizing these goals?
- What would you say to lenders who are considering services offered by MCT?
- Is there anything else you would like to say about working with MCT?
- Case Study Summary: Alpha Mortgage
When did you get started with BAM Marketplace?
In July 2020, Alpha started working with MCT when they transitioned from the Best Ex model to Mandatory. I came to work for Alpha Mortgage shortly after, in August 2020.
We signed up with MCT and right away took advantage of BAM Marketplace to find out what other investors are out there and what they are paying for. For the past 10 years, I’ve worked with MCT on and off at different companies and MCT is by far one of my favorite hedge advisory firms.
“For the past 10 years, I’ve worked with MCT on and off at different companies and MCT is by far one of my favorite hedge advisory firms.”
“We use BAM Marketplace with trading almost every day. It’s really convenient to go online and look at everything, to see my best execution and what my covers are. Some other hedge advisors I’ve worked with only give the best execution at the exclusion of the “next best” offerings.
With some investors there is a “pain factor” to take into account, in addition to actual pricing, which means that the “next best” execution might be better. For example, it’s no secret that certain aggregators offer a really great price, but we know that they are going to audit the heck out of the loan. So, when all is said and done, you’re going to spend another month, losing a half a point to a whole point in extension fees in order to make the commitment happen. Therefore, the secondary choice may end up being the better price and less of a headache.
The visibility offered in MCTlive! and BAM Marketplace allows for greater convenience to see all of your executions. Compared to other hedge advisors whose processes are very outdated and spreadsheet-based, MCT’s technology offers the convenience of a cloud-based platform and an intuitive user interface.“
What features of BAM Marketplace do you find the most useful?
“The primary features we utilize at Alpha are the trading features and color reports. At Alpha, we always strive to build great relationships with investors.
Another feature that really helps with this is the color report that I often send to investors. I really like a lot of the reporting functionality. We use the status/stagnation report to share that with Head of Sales which loans that are sitting stagnant in the initial application phase more than 10 days, to reach out to his loan officers to get those files moving through.“
Software Spotlight – BAM Marketplace is the First Truly Open Loan Exchange!
BAM Marketplace is the world’s first truly open loan exchange, where buyers can bid regardless of approval status, and sellers receive automated live pricing from every buyer on the platform. A revolutionary new era of maximized liquidity, eliminated barriers, and optimized execution is waiting for you. Join the vanguard of lenders reaping the competitive benefits of BAM Marketplace. Learn more about BAM Marketplace!
Is there any quantifiable monetary pickup gained by using this technology? How do you feel that the BAM Marketplace has saved you time in efficiency gains?
“From when we began using BAM Marketplace, I can determine that we have 8% of our production committed to BAM Marketplace buyers year-to-date. Out of that committed loan volume, we have an average pickup of 30 basis points over the cover bid.
In terms of time saved, our average approval time with investors used to be up to two weeks, but with BAM Marketplace buyers our average approval time is three days!”
What were some of the problems you were able to overcome with BAM Marketplace?
“We have certainly reduced risk and improved efficiency due to the improvement of our data integrity through using MCT’s technologies.
When Alpha first signed up with MCT, our data on the back end was hard to be trusted and could use some improvement. Using the data from MCTlive!, we were able to start fixing our data in our Loan Origination System (LOS). Now I trust 99% of my data.
Additionally, our company’s experience with BAM Marketplace is setting the groundwork for us to get our ticket with Ginnie Mae because we are going through approvals with BAM Marketplace clients that are buyers. Through those buyers, it’s going to be easier to get the Ginnie ticket. It’s been ten years since I’ve done Ginnie Mae pooling and the process of utilizing BAM Marketplace is acting as a sort of training exercise for when we do get approved with Ginnie.“
How do you feel BAM Marketplace has given you an edge over the competition?
“It totally has given us an edge, especially with the new FHFA regulations with non-primary residences. BAM Marketplace has really given me an outlet to see what other options I have out there.
About a quarter of Alpha Mortgages’ production volume is going to second homes and investments properties. So, the FHFA 7% cap earlier this year hit us really hard. We used BAM marketplace to find additional investors. Had I not had BAM marketplace, we would have been holding onto a few million dollars in funded loans and I might not have this job to be telling the story to you now. “
FURTHER READING – Additional Case Studies
MCT has had the opportunity to sit down with Ruoff Mortgage, First Bank and Eustis Mortgage to discuss how MCT’s offerings improved their loan sale efficiency and profitability. View their case studies below.
Are there any lessons or best practices that you would like to share with other as you have been using this platform for a few months now?
“Utilizing MCT’s software is a great matter of record to make sure your data integrity is accurate. BAM Marketplace gives you a great opportunity to see what else is out there. There will be buyers on that marketplace that you haven’t looked at before and now you have the opportunity to start that conversation with new investors.”
What has your overall lift over best efforts been thus far in basis points?
“We started running the data in September or October and we have been seeing a 100-120 bps improvement.“
How do you feel that MCT’s technology has helped you reduce risk?
“I really enjoy the ability to adjust hedge coverage to hedge my pipeline. As the market moves, I’m able to adjust how much coverage I want on my mortgage loan pipeline. Depending on the market movements, we will want to have more or less coverage.
For example, when the market is rapidly increasing and rates are going down, we can be subject to margin calls with the broker dealers. If market is rapidly increasing, I use MCTlive! to dial back the hedge coverage. The market improvement works as a partial hedge when there are reduced margin calls and pair-off fees.
If the market is decreasing, rates are going up and security prices are falling, so I will increase hedge coverage because I know I’m going to make less money when I sell the loan and I can make up that loss with excess hedge pair off. “
What’s it like working with MCT from a client service perspective?
“I’ve worked with MCT on and off for the past decade and I’m so grateful to have this relationship with MCT. I’ve always enjoyed working with MCT because communication and responsiveness has always been great. MCT has really good data quality and they are very responsive and engaging compared with other hedge advisors.
Back in the day, Chris Barnes was my trader, that’s how long I’ve been working with MCT! Sarah and Gina are excellent. Page Woodall is awesome, I love him. He’s one of the first people I’ve met in Charlotte. He’s just a genuinely nice guy who always goes above and beyond.“
What are your growth plans as a company, or as a capital markets professional? Do you see MCT supporting you in realizing these goals?
“The current goal of Alpha Mortgage is to be successful through 2021. The market has been crazy with re-fi’s drying up and lack of inventory with new loans sales. The FHFA regulations have been another challenge of 2021.
We have taken steps from a sales side to focus on our footprint, not necessarily to expand. In the future, we do plan to expand into the new builder business and setup a preferred lender relationship with them. As we grow that new builder relationship, there will be challenges such as long-term locks and associated hedging mechanics. We will be building up that strategy with MCT to build out those long-term locks with construction. That’s the business that’s going to sustain us into 2022.“
What would you say to lenders who are considering services offered by MCT?
“I have had experience with other hedge firms and everyone has their pluses and minuses. I would highly recommend MCT to other lenders that are around our size, as there are more personal interactions with traders and account reps at this hedge advisory firm. You simply don’t have the same level of access and personal interaction with the competition.
For example, at another hedge advisory firm, we talked to the sales rep once per year. With MCT, they are checking in and conducting calls monthly or bi-monthly with both the sales representative and traders on the call.
“I would highly recommend MCT to other lenders that are around our size, as there are more personal interactions with traders and account reps at this hedge advisory firm. You simply don’t have the same level of access and personal interaction with the competition. ”
When we go on these calls, we talk about our pipeline, accounting enhancements to the MCT system, loans sales or what’s going on with the market, such as when FHFA was coming out with those regulations. We discuss strategies with what we can do with all the loans, where we can put them, and how to mitigate potential losses. If you really want personal interaction and to build that relationship with your traders, or if you’re a data junkie like me, that’s really a highlight for me. There’s a lot of data you have access to and they are going to communicate with you.”
Is there anything else you would like to say about working with MCT?
“I’ve really enjoyed working with MCT, it’s been really great.”
Case Study Summary: Alpha Mortgage
MCT’s BAM Marketplace via MCTlive! and Hedge Advisory Services allow Alpha Mortgage to execute with confidence and gain an edge over the competition in their loan sale process. MCT’s software and services continue to ensure Mr. Collins’ best execution is at maximum efficiency and profitability.
- BAM Marketplace – The world’s first truly open loan exchange, where every loan can be priced by every investor, regardless of approval status.
- MCT Hedge Advisory Services – Lenders of every size trust MCT to manage risk and optimize profitability in their mortgage pipeline.
- MCTlive! – A comprehensive capital markets platform used for day-to-day loan pipeline management, trade positions management, and loan sale best execution.