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Mortgage Capital Trading, Inc., a mortgage hedge advisory and secondary marketing software firm, introduced BAM Marketplace. The company initially launched the marketplace in 2020 to support existing sellers during the 2020 pandemic liquidity crisis. Now, it is opening up the marketplace to new buyers and sellers.
In the early days of the pandemic, investors bought fewer loans and sellers ran into liquidity issues, especially for specific loan characteristics such as low-FICO government. BAM Marketplace connected distressed sellers with would-be buyers, particularly agency-approved lenders within the MCT client base, some without previous correspondent investing experience, according to a press release. The ability to transact with unapproved counter-parties, combined with API-driven automated live pricing, allowed these new buyers to provide a correspondent experience and quickly build a base of sellers.
Sellers benefit by reducing liquidity constraints, growing investor outlets, and increasing loan sale profitability, according to the company. MCT says its clients have noted materially improved execution across all loan types. The average spread to cover bids on BAM Marketplace is 32 basis points, with that spread extending to 46 basis points for government production and 89 basis points for low-FICO government loans. Sellers are also finding new outlets for non-owner occupied and second home loans – a key focus area given the new agency limits on such production.
“BAM Marketplace targets systemic issues of limited liquidity and slow turn times for pricing and also helps minimize a lender’s exposure to crises and regulatory changes,” said Curtis Richins, president at MCT. “It’s the only loan exchange where sellers can receive executable bids from unapproved buyers. Through our patent-pending ‘security spread commitment’, MCT firmly holds its position as the gold standard in best execution and moves one step closer to the ultimate goal – when every loan can be priced by every investor.”
Agency-approved lenders can find unique buying opportunities, even without the prior experience or cost calculations typically associated with launching a correspondent lending channel. MCT’s AutoBidTM bid tape pricing solution supports every BAM Marketplace buyer, allowing them to provide automated, algorithm-based live pricing that can be fine-tuned to each seller and loan characteristic.
"By extending the Bid Auction Manager (BAM) platform, MCT has unlocked additional liquidity and created a turn-key, digital purchasing solution,” said Phil Rasori, chief operating officer, MCT. “Proprietary, patent-pending functionality enables immediate access to ‘biddable’ loan collateral offered by MCT’s client base.”
Click here to learn more about BAM Marketplace.