The last 18 months have seen a significant shift in both the primary and secondary mortgage markets. Facing shrinking loan volume and compressed margins, lenders have broadened their loan products for borrowers who fall outside of traditional government or conforming guidelines, prompting investors to add programs that incorporate these loans.
But these new opportunities present real challenges. The number of investors has grown significantly since the financial crisis, with 150 organizations now actively buying loans. And the types of loans available for purchase have also multiplied. Combined, these factors have compounded the complexity of the secondary marketing function, demanding sophisticated automation for accurate content management and execution.
Fortunately, Optimal Blue has spent the last several years relentlessly auto-mating the entire secondary marketing process — from content to commitment, and everything in between — and can meet these challenges head-on.
Optimal Blue, founded in 2002, provides not only industry-leading solutions for originators and investors but also an enterprise-level, end-to-end platform that processes more than $750 billion worth of transactions each year. Its Digital Mortgage Marketplace connects mortgage buyers and sellers in an efficient, transparent process that facilitates a broad set of secondary market interactions.
The company’s view into the data associated with these transactions led it to develop the Optimal Blue Mortgage Market
Indices (OBMMI) to provide consumers and mortgage professionals with greater visibility into key drivers of mortgage pricing. Based on actual locked rates with consumers across more than 30% of all mortgage transactions nationwide, OBMMI provide the most extensive and accurate interactive analysis of pricing ever conducted in the mortgage industry.
OBMMI aggregates data from 2 million transactions a year between 800 lenders, 3,000 brokers, and 200 buyers of loans and synthesizes that data into 16 primary and detailed mortgage rate indices. Updated daily through a robust API, the indices can be compared with each other to isolate specific market movements and spot trends.
“For close to two decades, Optimal Blue has led the mortgage industry with pricing automation technology designed to facilitate transactions between consumers and lenders,” explained Bob Brandt, vice president of marketing and alliances at Optimal Blue. “Complete with the industry’s largest product eligibility and pricing library, and backed by an unparalleled commitment to accuracy, Optimal Blue’s platform ensures that consumers are presented with the best-fit financing alternatives and that lenders consistently deliver the best price.”
Optimal Blue continues to evolve its platform, providing lenders and investors with inspired technology that automates key functions of the secondary marketing process.
AUTOMATING THE SECONDARY MARKETING FUNCTION
Product Eligibility & Pricing
Optimal Blue is the largest product eligibility and pricing (PPE) provider in the industry, serving more than 50% of the market and processing $600 billion worth of rate locks every year. The company has made significant investments to automate this functionality and the result is a robust system that delivers a single source of compliant pricing with 99.995% accuracy, making Optimal Blue’s PPE the system of record for the mortgage industry.
That accuracy is a hallmark of Optimal Blue, which uses an extensive set of product filters to identify applicable loan programs and then evaluates best execution pricing among eligible products. This capability is even more critical given the growing number of non-QM loan products in the market.
In addition to the execution, content, and margin management that Optimal Blue’s flagship PPE is known for, the company recently rolled out a new innovation — a “lights-out” lock desk functionality that can automatically lock the loan, change the lock, change the product type, grant exceptions, and more.
“When it comes to secondary marketing, the lock desk is a high-cost function,” said Optimal Blue CEO, Scott Happ. “We’ve automated the entire process. Lenders can configure auto-accept policies for locking and relocking products with characteristics that don’t require a manual touch, thereby reducing lock desk involvement in scenarios where automated policies can do the work instead.”