Mortgage Capital Trading (MCT) has introduced Base Rate Generator, a new solution that allows mortgage lenders to directly inform their front-end rate sheet pricing with their back-end capital markets executions.
By combining live agency API connections, co-issue executions, aggregator pricing, and custom TBA indications, the MCT Base Rate Generator allows mortgage lenders to improve margin management and competitive performance.
“The Base Rate Generator has helped us to put out a better rate sheet to our loan officers and third parties,” says Brian Gilpin, chief financial officer and head of capital markets at Embrace Home Loans, in a release. “It has helped us to be more exact in our pricing which, as a result, has generated more business for us.”
Generating custom front-end borrower pricing – either through a base rate upload to a product and pricing engine (PPE) or through a formatted traditional rate sheet – is a constant challenge for mortgage lenders, particularly in the face of rapidly shifting market dynamics.
Based on live pricing connections to the agencies and an ever-growing network of broker-dealers and correspondent aggregators, MCT is uniquely positioned to architect a more accurate, granular, and efficient system for producing front-end pricing.
The Base Rate Generator was developed with direct input from clients of all sizes and includes industry-first features that satisfy lenders whether they securitize, deliver to the cash window, or prefer working exclusively with aggregators. Custom TBA indications on illiquid coupons can be incorporated directly, along with float carry and specified settlement calculations. Lenders can use the spec margin holdback feature to systematically withhold or pass-through the associated pay ups increasingly prevalent across the investor pricing spectrum. Best execution blending functionality supports selecting the second or third best execution as the pricing basis, or an average of the top several, to smooth out and protect against margin-killing outliers that may not be available for delivery on the back end.
“The recent past has presented many challenges for our lender community – market volatility, illiquid coupons, and higher interest rates to name a few,” says Phil Rasori, chief operating officer at MCT. “We’re proud of our on-going collaboration with clients to develop the best solutions to combat these challenges and preserve margins. The Base Rate Generator brings needed granularity and transparency to pricing in a way that has never been seen in our sector.”
MCT offers the Base Rate Generator as an add-on service for clients using its suite of capital markets solutions or as a stand-alone service.
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