Data-driven execution of closed loan collateral has enabled aggregators to price loans more efficiently than ever before.
Throughout the history of the secondary mortgage market, the “To Be Announced” (TBA) mortgage-backed securities (MBS) forward contract has required relatively few data inputs for efficient market pricing. However, this dynamic has changed for a variety of reasons.
In this blog, we showcase MCT’s educational article from April 2017, Trends In Secondary Execution: Big Data, Big Execution. Featured in Secondary Marketing Executive Magazine, it explains why there is now far more granularity in the pricing of the mortgage asset.
About The Educational Article in SME
We are proud to have one of our own capital markets experts featured in this premier publication.
Secondary Marketing Executive is a monthly, free magazine that provides mortgage executives in North America with a front row seat in the mortgage market. At MCT, we are dedicated to providing our clients and vendor partners with solutions that can assist in any stage of business growth. Learn more about hedging best practices from our experienced hedge advisers in the MCT newsroom.
Learn About the Trends in Secondary Execution
In this article, you will learn about how the rapid proliferation of data-driven execution of closed loan collateral has enabled aggregators to price loans far more efficiently than ever before.
“Trends In Secondary Execution: Big Data, Big Execution,” breaks down the events in the secondary market over the last 3 years that has led us to this change in dynamic.
“Loan level data is now essential to have, but data-driven bid tape execution will continue to dominate the loan sale process into the future. The resulting increased level of complexity in pricing of the asset absolutely requires a robust and educated best execution process.”
– Excerpt from Trends In Secondary Execution: Big Data, Big Execution
About The Author – Phil Rasori
Mr. Rasori is a recognized thought-leader in capital markets operations within the mortgage banking community. His areas of expertise include complex financial modeling, computational dynamics, and linear programming for operational optimization.
He developed the ground-breaking mortgage pipeline hedging algorithms that form the foundation of MCT’s HALO Program today. Mr. Rasori has functionally led MCT operations since 2005 and ascended to his current role as COO in 2007.
Download Trends In Secondary Execution: Big Data, Big Execution
We hope that this article will give you the assurance as a professional to determine the TBA security coupon that corresponds to a given note rate, and take the necessary actions to accommodate increased price granularity in the secondary market.
By utilizing these valuable and practical insights, you can look forward to a measurable difference in the certainty of your decisions that will impact your bottom line directly. Please download, read, and learn more from our experts.
Let us know what you think in the comments!