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Black Knight Inc. enhanced its CompassPoint solution, a risk management and loan sale platform for the secondary loan market. The enhancement includes a new algorithm that helps meet investor demand for longer-lasting mortgage-backed securities that also takes into account the lender's profitability and third-party relationships, according to a press release.
CompassPoint is used by lenders to eliminate the process of sorting through their closed loan inventory to find the optimal combinations pools that comply with the Securities Industry and Financial Markets Association's pooling minimums and tolerances, according to the release.
"The new algorithm we've created for our Pool Optimizer enhancement goes beyond the complexities of solving for best price by enabling our customers to incorporate the preferences of their investor partners with one click," said James Baublitz, managing director for pipeline analytics with Black Knight Secondary Marketing Technologies. "The latest enhancement to CompassPoint represents Black Knight's continued focus on innovation for the secondary market to help market participants improve profit margins and reduce risk."
According to Black Knight, the algorithm can solve for the optimal combination of pools based on the company's configurations and given SIFMA requirements, as well as credit stipulations and volume thresholds imposed by servicing buyers and the GSEs. Additionally, Black Knight revealed that the solution also gives lenders the ability to incorporate the borrower FICO score, property type, property state and more.