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Agile Introduces Competitive Electronic Bidding On Fourth Month TBA Mortgage-Backed Securities

Agile, a fintech bringing mortgage lenders and broker-dealers onto a single electronic platform, launched electronic bidding for the fourth month in the To-Be-Announced mortgage-backed securities (TBA) market. This marks a significant leap forward in the trading landscape of off-screen securities.

The addition of electronic bidding for fourth month securities ushers in a new era of efficiency. By offering the option to extend trade settlements an additional month, Agile’s electronic platform minimizes the need for frequent rolls, thereby streamlining the process of maintaining an aggregate hedge position.

Andrew Price1, Secondary Marketing Trader at Highlands Residential Mortgage, stated, “I use fourth month securities to hedge long-term builder forward contracts. Electronically trading fourth month on Agile is extremely efficient, and anytime I put fourth month in competition, my execution is better than a single-dealer bid. It’s always helpful to have that extra protection while trading an off-screen security.”

This groundbreaking development fosters a deeper understanding of trading dynamics for fourth-month securities, empowering market participants to make more informed decisions regarding their pricing compared to standard TBA security settlements. According to traders using Agile, the reduced frequency of transactions translates directly into increased efficiency and lower hedging costs, as each transaction incurs associated costs.

For builders, securing fourth-month TBAs via Agile offers a distinct competitive advantage. By aligning forward agreement rates with fourth-month security prices, Agile promotes pricing transparency from the inception of contracts, empowering builders to make more informed decisions.

Eric Bridges2, Vice President of Secondary Marketing at M/I Financial, shared, “Having the ability to bid fourth month competitively has yielded better, more reliable trading levels which provides greater confidence in offering stronger extended rate lock pricing or rate specials.”

Fourth month bidding is now available to all Agile platform users. Mortgage lenders and broker dealers interested in learning more about this functionality are encouraged to contact Agile for more information.

1 Andrew Price is a capital markets professional with more than 12 years of experience starting as a secondary marketing trader and growing into his current AVP Capital Markets role.

2 Eric Bridges is a VP of Secondary Marketing with more than 10 years of experience working as a secondary marketing professional.