ICE Makes Enhancements To Its Mortgage Prepayment Model

The Intercontinental Exchange, Inc. made enhancements to its mortgage prepayment model with daily residential mortgage rates from ICE Mortgage technology.

The mortgage rates are part of a new data service called ICE Locked Rate Feed, which provides a daily, anonymized feed of residential mortgage rates across 45 different loan programs from mortgages that were closed on ICE Mortgage Technology’s loan origination system (LOS), Encompass. The ICE Locked Rate Feed has been integrated into the ICE Data Analytics mortgage prepayment model.

“By leveraging this new dataset from ICE Mortgage Technology, we’re able to upgrade from a process that estimates mortgage rates using a weekly survey to daily transaction-based interest rates, with much more transparency into the mortgage market,” said Lynn Martin, president of Fixed Income and Data Services at ICE. “This is an important new offering for both the fixed income and lending market.”

Prepayment models are a critical component for fixed income investors in determining the price sensitivity and cash flow risks of mortgage backed securities — both for mortgage pools and collateralized mortgage obligations (CMOs), according to ICE. For lenders, the ICE Locked Rate Feed provides a reliable, up-to-date aggregated view into competitive lending rates, allowing them to benchmark their own products to others in the market.