MCT Introduces New Solution to Automate TBA Trading


Mortgage hedge advisory and secondary marketing software firm Mortgage Capital Trading (MCT) has launched a new product that enables more efficient bidding of TBA mortgage-backed securities used by lenders to hedge their open mortgage pipelines.

Trade Auction Manager (TAM) is a browser-based software module that is accessible via the company’s capital markets platform, MCTlive!

As per a company press release, TAM completely digitizes a formerly manual communication process to confirm time-sensitive TBA trades that were once largely phone-based. 

TBA trading, particularly with regional broker-dealers, is the last remaining secondary marketing function that relies on telephone communications, which TAM now successfully automates.

MCT developed TAM in collaboration with multiple lender clients and broker-dealers who participated in the testing and successful soft launch in early 2019.

With the introduction of TAM, the mortgage industry now has a TBA trading platform that allows broker-dealers to compete for a higher volume of trade requests, while lenders gain due to expansion and automation of the competitive bidding process.

Additional benefits of TAM include greater accuracy, increased speed, and a reduction of data entry errors, the company says.

When using TAM, all transactions are automatically recorded, creating heightened reliability and trackability of trades.

TAM leverages a single database of record, which centralizes critical data and simplifies trade reconciliations.

TAM integrates seamlessly with MCT’s hedging and loan sale platforms or it can be utilized independently as a standalone solution.

The launch of TAM follows MCT’s rollout of Bid Auction Manager (BAM), a whole loan trading platform that encrypts and automates the bid tape process for lenders and investors to achieve best execution on loan sales.

MCT reports that clients have been leveraging TAM to transact with a wide array of broker-dealers since the initial rollout earlier this year.

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