Mortgage Capital Trading, Inc. (MCT), a mortgage hedge advisory and secondary marketing software firm, has released BAMCO, a new marketplace for co-issue loan sales. Co-issue loan sales, also known as flow-based mortgage servicing rights (MSR) sales, are a three-way transaction involving the sale of loans to one of the agencies with a simultaneous sale of the MSRs to a separate third party. BAMCO brings co-issue transactions directly into MCT’s whole loan trading platform and improves price transparency by connecting unapproved sellers to live executions from potential buyers.
“BAMCO is the latest step toward realizing MCT’s vision of every loan being priced to every investor, supporting true best execution for sellers and a more efficient market for borrowers,” said Justin Grant, Senior Director, Head of Investor Services at MCT. “Historically, lenders have had far more whole loan outlets than co-issue outlets – we’re seeking to change that with BAMCO.”
BAMCO supports live, flow-based, loan-level MSR pricing, expanding execution options for sellers while creating new client acquisition opportunities for buyers. While co-issue executions via agency integrations have always been and will continue to be included in lenders’ loan sale best execution analysis, BAMCO brings in a new section featuring direct co-issue pricing for both approved and unapproved buyers.Co-issue buyers have the choice to deliver standard grid-based co-issue pricing or loan-level bid tape co-issue pricing.
In recent years, both Fannie Mae and Freddie Mac have pushed the market for co-issue loan sales forward with new servicing exchanges. This has supported the growth of co-issue transactions to represent 16% of all loan sales by MCT’s lender client base in 2022. BAMCO supports and expands upon the functionality provided by the agencies to facilitate live shadow pricing, more granular MSR bids, and expanded outlets over time. BAMCO serves agency sellers within the MCT hedge client base, particularly those not currently taking advantage of co-issue executions, while offering an opportunity for co-issue buyers to attract more sellers and provide more granular pricing.
BAMCO is a new set of executions within BAM Marketplace, the industry’s largest loan exchange which serves MCT’s three hundred mortgage lender clients. BAMCO is the latest in a series of groundbreaking innovations from MCT, from their original focus on best execution analysis to more recent rollouts such as electronic TBA trading and automation for Assignment-of-Trade (AOT) transactions.
“Given the advancement of BAMCO technology, MCT brings incredible selling efficiencies and pricing resources to the industry,” shared Chris King, SVP of Business Development at Mr. Cooper. “Mr. Cooper is excited to be a first adopter of BAMCO and we look forward to working with our clients, MCT, and the agencies to further the expansion of co-issue sales.”
There is no additional cost for MCT hedging clients to use BAMCO, which was released as part of their normal best execution loan sales process earlier this week. Interested parties can register to attend MCT’s upcoming BAMCO webinar to be held December 7, 2022.
The Place for Lending Visionaries and Thought Leaders. We take you beyond the latest news and trends to help you grow your lending business.