Three Necessities in a Capital Markets Platform–Optimal Blue Sponsored Content

Hitting the Sweet Spot

In the piñata game, people swing blindly to crack open a colorful object filled with treats. The fun, of course, is watching friends wildly flail as they try to strike the prize right in front of them.

But when it comes to running your business, swinging blindly at loan and margin pricing is anything but amusing. As the two main profit centers (or loss centers) for mortgage lenders, your ability to calibrate loan and margin pricing will largely determine your success.

To navigate a market where mortgage lenders are losing an average $2,100 per loan, you need a clear vision and a direct path.

Together, the three main components of a capital markets platform remove the blindfold and steady your swing, so you always hit the mark no matter how volatile the market.

1. Instantaneous Access to Accurate Pricing

Product, Pricing and Eligibility Engine

Pricing loans both competitively and profitably is a tough needle to thread, and it only gets trickier as more variables, volume, and volatility are introduced. When you add to the mix consumers’ expectations for fast, digital service, manual loan pricing methodologies become untenable.

By performing all the complex calculus for you, an advanced product, pricing, and eligibility (PPE) engine enables you to deliver accurate pricing and exceptional service while streamlining operations. Here’s how:

Accurate Pricing

PPE solutions allow lenders to offer extremely competitive pricing by evaluating thousands of loan product options – including conforming, non-conforming, jumbo, government, and portfolio products – for the best pricing. What’s more, insight into competitor and secondary pricing further dials in profitability.

Exceptional Service

Whether online or in person, borrowers expect prompt service that brings them up to speed on their options and how much they will cost. A PPE can integrate with both borrower and back-office-facing lending tools, which allows lenders to instantaneously identify the best loan products for borrowers based on borrower scenario and eligibility rules.

Streamlined Operations

Beyond quoting price, a PPE can reduce risk and production expenses by automating your lock desk with rule-based functionality. Reducing lock desk involvement, automated processes expedite loan processing, which makes borrowers happy.

2. Rich Data for Real-time Insights

Competitive Data Solutions

When it comes to data, quality is everything.

Sophisticated capital markets platforms offer real-time data solutions, collected directly from the source, and they refresh it constantly. They use data from investors, a broad universe of users, and your loan pipeline to reveal critical insights into the primary mortgage markets, secondary mortgage markets, and your own business.

A capital markets platform equipped with quality data can serve as a strategic ally for mortgage lenders by providing:

Market Intelligence

Market intelligence helps lenders identify subtle trends and shifts in portfolio performance and can inform strategy based on volume, margin, pricing, and compensation factors.

Benchmarking Tools

Benchmarking tools reveal how lenders stack up against peers in terms of pricing and product offerings.

Business Intelligence

Business intelligence helps lenders provide better borrower service and operate more efficiently and profitably.

3. Pipeline Risk Management

Hedging and Trading Tools

Advanced hedging and trading platforms enable lenders to achieve unsurpassed pipeline risk management.

Important features of a sophisticated hedging and trading platform include:

PPE Integrations

A PPE integration ensures lenders receive best efforts pricing from all configured investors while simultaneously verifying product eligibility to avoid quoting unsalable sources. It also enables your hedging and trading platform to sync hedge position based on locks in the PPE and use proven strategies to transition to mandatory delivery.

Loan Sale Automation
Access to a large loan trading exchange opens the door to loan sale automation. Automating loan sales enables lenders to get live bids and complete trades within minutes instead of days by eliminating the need to individually email investors bid tape attachments. What’s more, a loan trading exchange can view the specific details of the loan trades they were involved in.

Advanced Analytics

Hedging and trading platforms can leverage real-time data to offer advanced analytics. These analytics use rich data visualizations to help lenders model risk position and production. They can flag loan-level issues that impact investor eligibility, in addition to offering on-demand executive reporting.

Optimize Your Advantage

Unlock Profitability With Optimal Blue

To fulfill the momentous role of helping borrowers achieve the American dream of homeownership, lenders need a proven partner that provides innovative technology, along with the network, data, and expertise to succeed in dynamic markets.

Optimal Blue delivers on these needs by effectively bridging the primary and secondary mortgage markets to form a comprehensive capital markets platform – giving you the power to optimize your advantage from pricing accuracy to margin protection, and every step in between.

Our network brings together thousands of individual lenders, investors, brokers, and vendors to give you unrivaled functionality and real-time data that fuel profitability.

Optimal Blue’s capital markets platform is used to:

• price and lock 35% of mortgages completed nationwide
• facilitate $1.1 trillion in transactions annually
• support 38% of loans hedged and sold into the secondary market
• trade $375 billion of loans annually
• support 70% of MSR valuations done in the industry

Optimal Blue is the capital markets technology leader that empowers you to optimize your advantage to operate profitably in any market condition.

(Sponsored content includes material submitted independently of the Mortgage Bankers Association and MBA NewsLink and does not connote an MBA endorsement of a specific company, product or service. For more information about sponsored content opportunities, contact Bill Farmakis at or 203/834-8832.)