More than three dozen participants now trade regularly on the system
May 16, 2016, Los Angeles – Resitrader Inc.’s whole loan mortgage trading platform has passed the $500 million mark in loans traded.
“We think our timing was right, and the market is now ready for a platform of this type,” said John Ardy, Resitrader’s CEO. Resitrader’s platform debuted last October and now has more than three dozen active participants. “We believe we will become the industry utility for whole loan mortgage trading,” Ardy said.
Resitrader’s secure whole loan platform enables loan originators, banks, servicers, brokers and financial advisors to more easily and quickly buy and sell whole loans. Multiple buyers and sellers can offer, bid and transact simultaneously. Resitrader’s platform automates many activities currently supported through spreadsheets and makes it simple for buyers and sellers to communicate in real time, notify each other of loan pools they wish to trade, exchange loan data, documents and pricing information, and settle transactions easily. As a result, trading speed has been reduced from several hours to a few minutes.
Before Resitrader introduced its platform last year, mortgage loan trading was largely done through email, which is both insecure and inefficient. “You would have to email the loan details to potentially hundreds of buyers to get five or 10 bids,” Ardy said. “It was hard to discover who wanted what.” In contrast, Resitrader automatically normalizes loan data so buyers can easily search for loans by investment criteria and type. This efficient marketplace allows for easy distribution of information on loans for sale to hundreds of potential buyers.
What separates Resitrader from earlier efforts is its ability to facilitate transactions combined with accurate pricing.
“Our technology focuses on the process of trading and incorporates pricing,” Ardy said. “Other systems tend to focus just on calculating price. By looking at it as a process – distributing information on loans for sale, reviewing bids, negotiating the final price, confirming the transaction, and then exchanging the loan documents – we’ve been able to streamline the communication between loan seller and buyer. What used to take three hours now takes 10 minutes. You get more accurate pricing with less hassle. Our focus on process seems to have caught everyone’s attention.”
Ardy said loan buyers are particularly interested in “color,” which is the price at which similar loans are being purchased. Previously, this information was only available by “word of mouth,” Ardy said, but Resitrader provides buyers with “color” reports on each loan. Resitrader provides the most accurate loan pricing available because each loan is priced individually based on its own detailed and exact information.
Resitrader’s success has even spawned the creation of several new competing entities and rejuvenated several older platforms that had been largely dormant the past few years.
Ardy welcomes the competition. “We’re happy to see other companies recognize the advantages of whole loan trading platforms,” Ardy says. “This can only be a good thing for the industry since it will help lead to greater liquidity in the secondary mortgage market.”
A formal, organized secondary market also stands to expand the primary market itself by providing liquidity that will encourage lenders to create new loan products, and serving as an electronic conduit to loan securitizers. “Eventually, the benefits of a large and vibrant whole loan marketplace will benefit everyone in the industry, professionals and consumers alike,” said Chris Saitta, Resitrader’s chairman.
Resitrader, Inc. is a Calabasas, California-based provider of whole loan mortgage trade management software. Its whole loan platform enables loan originators, banks, servicers, brokers and financial advisors to exchange loan data, documents and pricing information in order to buy and sell whole loans. The system enables multiple buyers and sellers to offer, bid and transact simultaneously, and includes an easy-to-use trade settlement process. For more information, visit www.resitrader.com
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