Effective risk management in Secondary Marketing involves everything from understanding pull-through rates to taking decisive action based on pipeline data, commitments, and market movements. Enabling traders to move quickly is an integral part of our goal to enable lenders to sell loans the same day they close. 

An effective hedging strategy can be the difference between Best Efforts and Mandatory commitments, and increased volumes of Adjustable-Rate Mortgages (ARM) and Non-Qualified Mortgages (NQM) products. We believe traders should remain in control of their strategy, whether driven internally or with the help of a hedge advisor, while automating redundant and manual workflows so they can focus on driving revenue for the organization. Lenders must invest in technology now, especially in quieter markets, to be prepared and ready to act when the industry becomes more active. 

That’s why we are very excited about our collaboration with Tradeweb, a leading, global operator of electronic marketplaces for rates, credit, equities and money markets. Our collaboration offers the most innovative solution automating workflows for hedging-related risk in the industry, driving revenue and increasing efficiency for lenders.

A New Kind of Partnership

Mortgage hedging has always been a manual, time-consuming process. Together with Tradeweb, we’re changing that in a meaningful way.

Here’s what makes our collaboration different:

• Real-Time: Loan data is aggregated from our Loan Intelligence solution, combined with trade data from Tradeweb, informing traders in real-time.

• Smart Contract Efficiency: Using the Canton Network and Smart Contracts, decisions lead to automated reconciliation with potential for expansion with other service providers.

• Cross-organizational Automation: By seamlessly tracking loan and trade data across multiple platforms, lenders can automate workflows across multiple systems and with counterparties. 

Automation doesn’t mean giving up control. Through our collaboration, traders stay in the driver’s seat and continue making the decisions, while the repetitive, time-sensitive tasks happen automatically in the background. That’s a major win in an industry where timing is everything.

Smarter Risk Management Through Data

Working with Tradeweb brings us closer to our larger vision: enabling same-day loan sales. 

Hedging isn’t just about risk management. It’s a key link in a larger chain that includes pricing, commitments, investor delivery, and risk management. By streamlining each of these steps, we are bringing the industry closer to real-time liquidity.

With every layer of automation, we are approaching a future that enables smarter and faster loan sales, enabling meaningful savings and freeing up time for the most critical people in Secondary Marketing: traders.

The Power of Smart Contracts

One of the most powerful elements of our solution is the use of smart contracts – automated, rules-based digital agreements built to handle the unique complexities of mortgage lending.

Mortgages are unique and complex, while instruments are standardized. Smart contracts create a bridge, accurately modeling both sides of the transaction to enable automation. Built on the Canton Network and aligned with MISMO standards (the mortgage industry’s data standards body), these smart contracts allow seamless data sharing across systems and organizations. Industry participants can plug into the process by integrating directly with the contracts instead of several bespoke integrations to each participant. 

Unlike generic tools, our smart contracts are purpose-built for the mortgage industry. That’s what makes them viable and powerful. They don’t just automate a process; they enable a new kind of market infrastructure that’s more connected, efficient, and ready to scale.

The Future of Mortgage Markets

We aren’t attempting to reinvent the mortgage market. Instead, we’re building on what works – streamlining key pain points with automation, secure data sharing, and a relentless focus on quality.

Our mission is to make homeownership more affordable. Eliminating inefficiencies, reducing latency, and unlocking liquidity is how we get there.

Working with Tradeweb exemplifies what’s possible when emerging technology, high-quality data, and institutional experience come together with a shared goal: faster, more efficient mortgage markets for shared customers.

By automating hedging workflows and enhancing trade execution, we are proving that better infrastructure can lead to better outcomes – for lenders, investors, and ultimately, homeowners.