Mortgage Capital Trading reports that it has incorporated its patent-pending geocoding technology into its Bid Auction Manager (BAM) whole loan trading platform.
This will shield borrower addresses from being shared with non-buying entities throughout the whole loan bidding process.
“Concealing borrower addresses for whole loan bids is the most recent step that MCT is taking to heighten data security while protecting borrowers and lenders,” says Phil Rasori, Chief operating officer and head trader at MCT, in a release. “We estimate that upwards of 90 percent of all secondary marketing transactions expose borrower addresses to non-buying bidders. The only investor that should eventually see the property address is the one that wins the loan.”
Rasori adds that the geocoder enables investors to price LMI-CRA incentives without the address.
Historically, only a handful of non-identifying data points were used to determine loan pricing in the secondary market. However, the advent of Community Reinvestment Act (CRA) requirements and spec pay-ups combined with the rapid adoption of delivery via bid tapes resulted in the full property address being disclosed to bidders in the majority of transactions executed over the last several years.
While clear contract terms typically govern borrower data usage for the whole loan buyer and seller, they generally fail to address the non-buying bidders, according to a review of MCT’s lender clients.
This can be a sensitive area for some parties, in particular for EPO (early pay off) and servicing pre-payments, as refinancing terms do not take into account safeguards for borrower loan data during the bidding process.
MCT also recently implemented multi-factor authentication (MFA) security protocols into its MCTlive! capital markets software.
MCT says that the geocode-enabled conversion process has already begun with investors; addresses will be completely removed from all MCT bid tapes by 2019.