We recently sat down with Matt Danilowicz, the CEO of Doorway Home Loans, who leverages MCT’s technology and industry expertise to manage his mortgage pipeline and mortgage servicing rights (MSR) portfolio.
Mr. Danilowicz considers MSR asset management and pipeline hedging to be an important component to maintaining continued profitability. He also closely reviews the guidance provided by his capital markets advisor and appreciates the material impact it has on his business results.
In this case study, Mr. Danilowicz explains how MCT’s MSR team helped Doorway Home Loans successfully facilitated a $1 billion MSR Sale. He also describes how MCT was instrumental in providing critical guidance through the 2020 market uncertainty and volatility.
Matt Danilowicz
Chief Executive Officer of Doorway Home Loans
Mr. Danilowicz was brought to Doorway Home Loans to improve the profitability of the business. He is a seasoned CEO with a well-recognized history of start-ups, turnarounds, and consolidations. He also focuses on creating a culture of learning and human asset development.
Featured Quote: “The MSR team was absolutely crucial to the success of our MSR sale. I’m confident that with MCT’s guidance, we added 15bps of additional profitability on our $1 billion portfolio sale or approximately $1.5 million. Every time there was an issue or challenge during the transaction, Phil Laren and others from the senior management team at MCT stepped in to ensure the deal went through as agreed and on schedule.”
How MCT Adds Value with Industry Expertise
MCT provides clients innovative software and expertise for lenders at every stage of growth. Industry expertise along with timely market guidance helped Doorway Home Loans quadruple in size in 2020.
MSR Services – MCT’s MSR Services team provides a wide array of MSR software and services to help clients achieve their goals. This includes innovative valuation software like MSRlive!, as well as other services like portfolio valuations, enhanced best execution for retain-release decisions, MSR sales and brokerage, MSR hedging, custom pricing grids and more.
Hedge Advisory – MCT’s Hedge Advisory services provide innovative software and critical guidance for navigating market volatility. As the industry leader in pull-through analytics and best execution with the highest staff-to-client ratio, lenders of every size trust MCT to manage risk and optimize profitability in their mortgage pipeline.
Market Guidance – MCT clients consistently receive exclusive training, guidance and access to client-only webinars. MCT also releases critical MarketFlash updates to clients, which provide extremely timely information that reduces risk and protects client profitability based on market movements.
Contact us for a sneak peek at the services leveraged by Doorway Home Loans.
Benefits Summary: Doorway Home Loans
Doorway Home Loans was able to leverage MCT’s unique blend of industry expertise and innovative software to ensure maximum profitability. Learn how Doorway Home Loans increased profitability on their MSR sale and navigated the market volatility in 2020.
Profitability
“I’m confident that with MCT’s guidance on our MSR sale, we added 15 bps of additional profitability on our $1 billion MSR sale or about $1.5 million.”
million pickup on MSR sale
Customer Service
“Phil Laren and his team of experts brought us the buyers, gave us confidence in the offer without the burden of going through scores of bids, and then guided us through the entire transaction from start to finish. Their team was able to review our portfolio and provided us with guidance throughout the process specific to which loans to retain and which loans to sell. This was of critical importance for us.”
MSR Sales
“In a very short amount of time we were able to build trust with one another. To do this successfully, it’s essential that you’re dealing with a company that has credibility, a clear track record of experience, and people you can just talk to and speak to openly about your concerns and challenges. Phil Laren and the MSR team possessed all those key qualities and I have found those qualities in everyone at MCT.”
Market Guidance
“The guidance provided during market volatility in 2020 was fundamentally critical. They were like a life buoy in a hurricane and helped our business quadruple in size in 2020.”
Full Interview: Doorway Home Loans Improves Profitability with MSR Services
Read our question / answer style format with the full responses from our conversations with Matt Danilowicz.
- What MCT services are you currently using?
- What is your strategy for MSR and retain-release decisions?
- Describe the process working with MCT on your MSR sale.
- How would you describe the value of the MCT MSR Team during your MSR sale?
- How would you describe the customer service from the MSR Team?
- Tell us how MCT’s client communications during 2020 market volatility affected your business?
- Do you have any examples of how client communications changed your strategy?
- What would you say to lenders who are considering services offered by MCT?
What MCT services are you currently using?
“We use MCTlive! and rely on MCT for MSR portfolio valuations and bulk MSR sales. MCT also does all statistical evaluations on lock pipeline and IRLC valuations.
There’s absolutely a synergy there when you work with both MCT’s hedge advisory and MSR services teams. I think strategically to have the confidence that both halves of the house are knowledgeable about your business but also have info about what’s happening with the other half creates a synergy where the whole is greater than the sum of its parts.
On an informal basis, we turn to MCT regularly for guidance on hedge positions and the market in general. We’re avid fans of Phil Rasori’s video webinars and Phil Laren’s MSR updates. Those have a really high value in itself.”
What is your strategy for MSR and retain-release decisions?
“Our strategy is to amass a certain amount of MSR’s then bring to market when a decent size portfolio is developed. We repeat this process over and over.
This strategy to retain MSRs serves two purposes for us. First, it creates an ongoing revenue stream to help stabilize inherent fluctuations in the market. Our servicing portfolio provides some stability with our cash flows and income to help level some of the earnings volatility and fluctuations.
Servicing revenue is a natural cross-hedge to production revenue. As rates worsen and retail business deteriorates, the value of servicing production increases. When times are more challenging and there is potentially a need for a cash-infusion it’s a tremendous asset to be able to leverage to improve your cash position.”
“We began working with MCT’s MSR team and they were instrumental in assisting in negotiations and bringing to a mutually beneficial conclusion.”
Describe the process working with MCT on your MSR sale.
“We made decision to sell portfolio in middle of 2019 because we needed cash at that time. We began working with MCT’s MSR team and they were instrumental in assisting in negotiations and bringing the deal to a mutually beneficial conclusion.
Phil Laren and his team of experts brought us the buyers, gave us confidence in the offer without requiring us to go through scores of bids, and then guided us through the entire transaction. Their team was able to review our portfolio and provided us with guidance on which loans to retain vs. sell.
It was also important for our company that the transaction didn’t involve any unnecessary delays and also maintained an appropriate level of confidentiality. Without the MSR services team helping us through this process and guiding us throughout, we really could have seen a huge amount of money lost. When it comes time for us to sell again, I’ll be seeking out MCT’s MSR Team for their expertise and support.”
Software Spotlight – MCT’s MSRlive! is Industry’s Most Customizable MSR Valuation Model
Our mortgage servicing rights software, MSRlive!, helps MSR Portfolio Managers and mortgage banking professionals more efficiently build, optimize and manage their MSR portfolio. Features like portfolio valuation, custom grid pricing, rate shock analysis and detailed reporting allow you to account for every market scenario. Learn more about MSRlive!
How would you describe the value of the MCT MSR Team during your MSR sale?
“The MSR team was absolutely crucial to the success of our MSR sale. I’m confident that with MCT’s guidance on our MSR sale, we added 15 bps of profitability on a $1 billion portfolio, or about $1.5 million.
On top of that, if there was ever a problem during the transaction, Phil Laren and other senior management at MCT stepped in to ensure the deal went through.”
How would you describe the customer service from the MSR Team?
“I’m confident that with MCT’s guidance on our MSR sale, we added 15 bps of profitability on a $1 billion portfolio or about $1.5 million.”
“In a very short amount of time we were able to build trust with one another. And again, trust is critical here because you have a lot of company’s net worth at stake in these transactions.
You have to make sure you’re dealing someone who has ultimate credibility, a clear track record of experience, and someone you can just talk to and speak to openly. Phil Laren and the MSR team had all those qualities and I found those qualities in everyone at MCT.”
Tell us how MCT’s client communications during 2020 market volatility affected your business?
“How do I even find an adjective to describe it? Fundamentally critical. They were like a life buoy in a hurricane.
The client communications during the volatility in 2020 provided a baseline of understanding at a time when the market had broken down. At the end of March and April, all the market mechanisms had become dysfunctional. The hedge and other components weren’t running as expected. It was critical to gain those perspectives and MCT’s recommendations and advice proved to be invaluable down the road. We could have easily made some missteps during that time which we didn’t due largely because of solid guidance from MCT.”
FURTHER READING – Recent MSR Publications
MCT strives to ensure MSR clients are up to date with the latest market insights. View the articles below for a look into how MCT’s MSR Team ensures client success through various market conditions.
Do you have any examples of how client communications changed your strategy?
“Our strategy has definitely been enhanced after viewing client webinars and getting market context from MCT. They highlighted the potential of risks associated with forbearance plans in addition to the importance of maintaining high margins. Other suggestions, including maintaining high margins on FHA originations to ensure that we have adequate loan loss reserves in place and appropriate liquidity to deal with what’s potentially coming down the road.
Another example was during the spring of 2020. Had we not taken advantage of the strong counsel from MCT, we might have been too fearful and potentially too risk averse to seize the opportunity and expand production of Ginnie Mae loans. MCT was a critical voice to help us proceed with confidence to go all in and resuscitate our Ginnie Mae production. Getting back into the servicing business as well, generated lot of revenue as a result.”
What would you say to lenders who are considering services offered by MCT?
“Running a mortgage bank can be a lonely place. If you can’t find trusted counsel, the critical decisions in the business can become nerve rackingly stressful. The expertise and sense of customer service and problem solving is always received from MCT and has made me confident that I’ve got some friends on my side and in my corner helping me navigate these treacherous waters.
I wholeheartedly know MCT is our trusted capital markets partner. In all our dealings I’ve always felt like they were on my side in whatever decision we were working through and in whatever challenges we were facing. I have never felt that MCT was working in any other interest except my own. And I have even felt that way in circumstances where MCT could have likely made more money by offering a different recommendation or a different solution, but they have always put my interests first.”
Case Study Summary: Doorway Home Loans
With the help of MCT, Doorway Home Loans was able to increase the profitability of their MSR Sale by $1.5 million and leverage MCT’s market guidance to help them quadruple in size in 2020.
The ability of the MSR team to find a buyer, negotiate the bid and help facilitate the deal proved critical for Doorway Home Loans. MCT’s consistent client communications, like client webinars and MarketFlashes, also helped Doorway Home Loans through the turbulent market. Schedule a demo or request more information about MCT’s services!
- MSR Services – MCT’s MSR Services team provides a wide array of MSR software and services to help clients achieve their goals. This includes innovative valuation software like MSRlive!, as well as other services like portfolio valuations, enhanced best execution for retain-release decisions, MSR sales and brokerage, MSR hedging, custom pricing grids and more.
- Hedge Advisory – MCT’s Hedge Advisory services provide innovative software and critical guidance for navigating market volatility. As the industry leader in pull-through analytics and best execution with the highest staff-to-client ratio, lenders of every size trust MCT to manage risk and optimize profitability in their mortgage pipeline.
- Market Guidance – MCT clients consistently receive exclusive training, guidance and access to client-only webinars. MCT also releases critical MarketFlash updates to clients, which provide extremely timely information that reduces risk and protects client profitability based on market movements.
