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Instead of a digital experience to manage the flow of data and decisions in situations like a negotiated trade transaction, many investors still rely too heavily on spreadsheets and phone calls. Often, this leaves both buyer and seller equally unsatisfied with the process and turn-time.
Correspondent investors who bring together the 3 steps in the negotiation process through a digital commitment desk will see improvements in both margin and throughput.
Submitting the bid tape
The bid tape brings red tape to the commitment negotiation process: countless rows of loan data, many different formats from each unique seller, and changes lost in version control. One of the benefits of automating the upload of sellers’ bid tapes is that technology can be “trained” to consume multiple file formats from unique sellers, eliminating manual formatting efforts that delay delivery.
System mapping of fields in the files against a pre-configured library of required fields saves time for both investor and seller. This includes checks for missing data, incorrect data and product eligibility so the investor can be assured they have the needed complete and valid loan detail or can request more information from the seller.
Setting custom price parameters
Every successful negotiator knows the working parameters in which they’re comfortable. When it comes to eligibility of files within a negotiated trade, technology can allow investors to firmly establish their custom parameters (i.e., filtering data based on minimum and maximum thresholds for elements such as Credit Score, LTV, CLTV, etc.) and efficiently exclude the loans that fall outside of those parameters.
Once this process is complete, automation can generate best effort (BE) pricing, following investor defined lock policies, for each of the seller’s loans and reflect these results within a digital dashboard.
In some systems, final pricing, determined by the Investor, can be imported or manually entered and appears side by side with the best efforts (BE) price. The systems mark the Investor price against the system generated BE price to ensure lock desk rules, such as LLPA changes and relocks and govern all downstream changes throughout the loan review and purchase process.
As an added value to the Investor, all loans removed from the trade are captured and designated as lost or not bid by the system. The advanced analytics tool allows the Investor to track won and lost bids and filter the data by any tracked data point to evaluate future changes in their parameters.
Life of Loan Commitment Tracking
Once the seller accepts the offer, the commitment is opened and can be managed by the investor and seller via user-friendly dashboards that can track the timely delivery of files associated with that commitment.
A complete summary of the commitment provides both parties an at-a-glance view into the status of all loans within the commitment including how many loans have been delivered and funded against the trade.
Customizable Lock Desk rules identify eligibility issues and govern price changes, relocks, extensions, expirations across all delivery types and loans that have been canceled or denied during the review process. The Investor can then either process the required changes in an automated fashion or send communication alerts.
An Investor view of all open commitments across sellers also displays commitment-level detail showing percent funded and any impact to eligibility, further highlighting the status of throughput.
To effectively create and manage correspondent loan acquisition volume, Investors must move to a digital commitment desk that enhances speed and automation in bulk transactions.
Sure, email and spreadsheets have their place facilitating the way we do business. But, when it comes to bid tape submissions, pricing actions and trade visibility, the process must be as fluid as possible to ensure both parties happily and quickly commit.
To learn more about LoanLogics’ correspondent loan acquisition platform visit: http://loanlogics.com/loan-management/investor-module.html
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