‘Considering’ the bottom line in your best execution analysis

MCT, a capital markets advisory firm with a focus on providing advice-based services and technology, partnered with valuable input from Freddie Mac, to compile relevant information pertaining to the hidden costs associated with lenders when partnering with new investors on the secondary market.

“If you have the right set of investors, you’re more than likely to get a better price if they are all bidding on the same loan. This is easily quantifiable,” David Ring (pictured), senior marketing manager, Mortgage Capital Trading, stated.

“What this whitepaper is addressing, however, is those considerations in your best execution analysis that are harder to quantify. We are attempting to help put a number around some of these often-overlooked business processes,” he added.

When a lender is analyzing the varied expenses associated with considering a potential buyer and is buckling down to go over the pluses and minuses on their balance sheet, Ring pointed out that there are often overlooked costs that must be weighed into the financial equation.

“Something to consider is if you foresee a small pricing increase by selling to a new investor, but it is going to take your team substantial effort and months of work to get approved by that investor, then maybe there isn’t enough juice to squeeze there,” Ring explained.