Mortgage hedge advisory and secondary marketing software firm Mortgage Capital Trading, Inc. (MCT) reports that it has automated the process of digital TBA trade assignment during the loan sale process for both mortgage lenders and participating correspondent investors.
This automation makes assignment of trade loan sales (AOTs) faster, more convenient, and easier for investors to offer, and is expected to further expand on the $19.5 million in cumulative savings experienced by MCT’s lender clients as a result of AOTs in 2022, the company says in a release.
AOTs are an increasingly popular industry practice that involves three counterparties – mortgage originator, mortgage investor, and broker dealer – transferring loan collateral and hedge positions to a mortgage investor and executing a tri-party agreement.
While the AOT process has been automated for MCT mortgage originators for several years, recent improvements to the functionality have automated the process for participating correspondent investors with support from an integration with Agile’s TBA platform.
“During a time of extreme pressure on profit margins industry-wide, we’re proud of the impact AOT automation has had for our lender and investor clients,” says Justin Grant, senior director, head of investor services at MCT. “Based on our conversations with investors who offer AOTs, we estimate MCT lenders represent around ninety percent of AOT executions in the market today.”