NMP - October 2016 - 81

might lead to a consensus to a standard document. Importantly, however, the MLPA will still need to be a oneto-one relationship, meaning each buyer to each seller. There is consensus that a multi-party agreement will not work, but a common document for each counterparty pairing might. So, then, if we are getting closer to a standard MLPA, what's the next step? How will technology facilitate online whole loan mortgage trading as a result? Here are six benefits we can expect from a technology-driven mortgage loan trading platform made possible by standardized data: Trading platforms will soon become an important intersection for everyone in the secondary market. Already, dozens of major players-banks, servicers, investors, hedge funds and others-are trading thousands of loans through a platform. The day of inefficiently using an Excel spreadsheet to track whole loan trading will soon be long gone. Two cheers to that. John Ardy is chief executive officer of Resitrader Inc., a Calabasas, Calif.-based provider of whole loan mortgage trade management software. He can be reached by phone at (310) 469-1640 or by e-mail at John.Ardy@Resitrader.com. 81 n National Mortgage Professional Magazine n OCTOBER 2016 What's next? Secondary market trading technology, like the technology widely in use in mortgage loan origination and servicing, has finally arrived. Its widespread adoption by the industry is not a matter of "if," but of "when." In order to get where we need to be, we need to adopt proper procedures for standardizing data. Eventually, we'll be able to increase transactional speeds so that buyers and sellers can continue to increase liquidity in the marketplace. "Secondary market trading technology, like the technology widely in use in mortgage loan origination and servicing, has finally arrived." NationalMortgageProfessional.com 1. Greater efficiency: Standardized data and a common MLPA would dramatically increase the efficiency of the loan trading process. Technology would support this with embedded code for "tape cracking," and document signing would become a function of the trading process. 2. Enhanced security: Emailing spreadsheets is not a secure way to trade whole loans, yet many still do it. In a trading platform, that risk is largely removed by encryption technology. Data and documents are stored in a secure, passwordprotected environment. Just like any other financial system, it removes the unknowns and dangers in transferring data and documents via unsecure email. 3. Improved communication: Rather than communicating via e-mail or telephone, buyers and sellers communicate in real-time directly through the platform, facilitating safe and transparent communication. Traders on both the buy and sell sides view the same data at the same time, and can notify each other of loans and pools they wish to trade via "chat" functionality. They can exchange loan data, documents and pricing information and settle transactions, all without exiting the platform. 4. Wider search options: Sellers will be able to create pools from their inventory by searching multiple criteria to create offered pools. Buyers can search by loan criteria, seller or pools and create their own pool reflecting their investment criteria. If they choose to do so, they can ignore the seller's pool and focus on an investment strategy across pools. Buyers can also create an "axe," which is a defined search criteria that continually looks for any of the loans posted on the platform that match what the buyer wants. 5. Automated best execution in real-time: Best execution will help the seller determine the best delivery for every loan, whether that is standard delivery options or a bulk bid. One buyer might want the entire pool, another might want just a portion, while yet another might want to pick and choose. Calculating which results in the best return for the seller in a spreadsheet is tedious. A platform provides best execution automatically and in real time so traders spend more time making good decisions rather than running math scenarios. 6. More system integration: Online trading platforms enable users to directly integrate their pricing engines, loan origination systems and service providers. http://www.findmortgagejobs.com/ http://www.NationalMortgageProfessional.com http://www.findmortgagejobs.com/

Table of Contents for the Digital Edition of NMP - October 2016

Table of Contents
NMP - October 2016 - Cover1
NMP - October 2016 - Cover2
NMP - October 2016 - 1
NMP - October 2016 - Table of Contents
NMP - October 2016 - 3
NMP - October 2016 - 4
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NMP - October 2016 - Cover3
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