Mortgage Capital Trading, Inc. (MCT), a mortgage hedge advisory and secondary marketing software firm headquartered in San Diego, introduced BAM Marketplace, which it called “the world’s first truly open loan exchange between unapproved counterparties.”
BAM Marketplace originated in the early days of the COVID-19 pandemic and was designed to support existing MCT sellers during a time when investors were buying fewer loans and sellers were running into liquidity issues. The loan exchange connected distressed sellers to would-be buyers, particularly agency-approved lenders within the MCT client base, some without previous correspondent investing experience.
The ability to transact with unapproved counterparties, combined with API-driven automated live pricing, allowed these buyers to provide a top-tier correspondent experience and quickly build a base of sellers, the company said in a release.
“Gone are the days of a finite set of approved investors, not knowing who has an axe, and incomplete information on who may offer the best price,” MCT President Curtis Richins said. “BAM Marketplace targets systemic issues of limited liquidity and slow turn times for pricing and also helps minimize a lender’s exposure to crises and regulatory changes.
“It’s the only loan exchange where sellers can receive executable bids from unapproved buyers,” he continued. “Through our patent-pending ‘security spread commitment’, MCT firmly holds its position as the gold standard in best execution and moves one step closer to the ultimate goal – when every loan can be priced by every investor.”
Now, BAM Marketplace is available to lenders of every size for loans of every type. Benefits to sellers include a reduction in liquidity constraints, growing investor outlets, and an increase in loan sale profitability. MCT said its clients have reported materially improved execution across all loan types.
Buyers are offered efficient access to the industry’s largest community of sellers and the ability to bid on loans offered by unapproved lenders. Additionally, agency-approved lenders can find unique buying opportunities, potentially without the prior experience or cost calculations usually associated with launching a correspondent lending channel.
“The average spread to cover bids on BAM Marketplace is thirty-two basis points, with that spread extending to forty-six basis points for government production and eighty-nine basis points for low-FICO government loans,” the release stated. “Sellers are also finding new outlets for non-owner occupied and second home loans – a key focus area given the new agency limits on such production.”
MCT offers BAM Marketplace to its clients as part of its core offering with no additional cost or set up. Non-clients also can take advantage of the loan exchange as a stand-alone platform.
“By extending the Bid Auction Manager (BAM) platform, MCT has unlocked additional liquidity and created a turnkey, digital purchasing solution,” Phil Rasori, MCT chief operating officer, said. “Proprietary, patent-pending functionality enables immediate access to ‘biddable’ loan collateral offered by MCT’s client base – the largest in the industry.”