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Mortgage Capital Trading, Inc. (MCT), a San Diego-based mortgage hedge advisory and secondary marketing software firm, announced that it is incorporating the company’s patent-pending geocoding technology into its Bid Auction Manager (BAM) whole loan trading platform in order to shield borrower addresses from being shared with non-buying entities throughout the whole loan bidding process.
“Concealing borrower addresses for whole loan bids is the most recent step that MCT is taking to heighten data security while protecting borrowers and lenders,” said Phil Rasori, COO and Head Trader at MCT. “We estimate that upwards of 90 percent of all secondary marketing transactions expose borrower addresses to non-buying bidders. The only investor that should eventually see the property address is the one that wins the loan. MCT's proprietary BAM Geocoder enables investors to price LMI-CRA incentives without the address.”
Historically, only a handful of non-identifying data points were used to determine loan pricing in the secondary market. However, the advent of Community Reinvestment Act requirements and spec pay-ups combined with the rapid adoption of delivery via bid tapes resulted in the full property address being disclosed to bidders in the majority of transactions executed over the last several years.
While clear contract terms typically govern borrower data usage for the whole loan buyer and seller, they generally fail to address the non-buying bidders, according to a review of MCT’s lender clients. This can be a sensitive area for some parties, in particular for EPO (early pay off) and servicing pre-payments, as refinancing terms do not take into account safeguards for borrower loan data during the bidding process.
Rasori added, “Ensuring that our systems and processes are as secure as possible is always of the highest importance. We are confident that this new level of protection will become the standard in the near future, and we’re proud to lead the industry in this direction.”
Notable is that MCT recently implemented multi-factor authentication security protocols into its MCTlive! capital markets software, requiring multiple methods to verify a user’s identity for logins and transactions. In July of 2017, MCT officially rolled out its award-winning BAM platform, in part, to migrate sensitive borrower data contained in bid tapes off of email to a centralized, secure platform.
Company officials at MCT say that the geocode-enabled conversion process has already begun with investors; addresses will be completely removed from all MCT bid tapes by 2019.