In an effort to outpace existing competitor offerings and capture additional business, hedge advisory firm Mortgage Capital Trading Inc. (MCT) has added a number of new features to its best execution service offering.
The enhanced service is an extension of MCT’s existing best execution methodology, which is traditionally offered with its proprietary hedging services.
The option to leverage the new feature set is ideal for lender clients interested in deepening their retain/release decisioning processes and cash management concerns, the firm says in a press release.
The firm’s best execution service now offers additional dimensions of time to payback, cash drain, corporate tax structure, subservicing terms and mortgage servicing rights (MSR) financing possibilities, which the firm says are not available in other best execution models.
“Lenders, especially non-bank mortgage companies, need to be acutely aware of their cash needs and balance sheet liquidity, in addition to getting the best economics out of a loan sale,” says Phillip Laren, director of MSR services at MCT, in the release. “The enhanced best execution tool provides analytics to compute cash loss after adjusting for tax impact, months to breakeven and any lift through MSR financing. It’s unique in that it analyzes servicing options not just from a secondary marketing perspective, but also from the financial management side of the business by considering cash spent to retain and when it may eventually be recovered.”
MCT’s best execution model is completely customizable to actual subservicer costs, tax structures and financing terms.
“What if” scenarios can be set to run different scenarios to empower a chief financial officer and secondary trader with data to determine the best decision based on economics, cash, balance sheet and tax optimization concerns, the company says.