Secondary Marketing departments operating to industry best practice standards require extensive planning and structure. Third party validation is often required or desired by boards, correspondent investors, warehouse lenders or regulatory agencies. Our services include:
- Comprehensive departmental operations reviews
- Hedge program effectiveness and profitability
- Rate lock policy guidance
- Financial performance review
- Management and staff evaluations
- Review of policies, procedures and internal Controls
- Risk management committee development (ALCO)
- Internal audit guidance
A major issue facing small and medium sized financial institutions and mortgage bankers is pricing. In order to offer competitive pricing, you need to be able to get competitive pricing when the loans are sold. Selling loans flow mandatory or bulk mandatory can provide a substantial increase in sales price. The challenging part, is knowing how to accurately measure and mitigate the interest rate/pricing risk, from the time the loan is locked, until the time the loan is committed for sale. This is accomplished by moving the subject loan into a “hedged” position that neutralizes price risk.
It is our experience that few operational staff personnel possess the requisite knowledge or experience to manage this process. The good news however, is that cost effective solutions are available that can position you to move into the world of mandatory deliveries and higher profits.
We can help educate you and guide you through this process. With our expertise, you will have the knowledge, policies, procedures and controls in place, to move into a hedge environment in a safe, sound and compliant manner.
Benefits of Mandatory Delivery:
Mandatory delivery means better price execution
Best execution analysis post closing, allows you to sell to investors with the best price
Mandatory/Bulk deliveries can produce higher sales process
Financial institutions must be careful to implement safe and sound operational controls to manage all secondary marketing activities. This will help assure senior management and the board meet the expectations of your regulators and position the institution to experience higher earnings in regulatory friendly environment. We help guide you through this process.