T E C H TA L K
Tech Talk By Suha Zehl INNOVATION IN THE SECONDARY AND CAPITAL MARKETS
I
am neither a secondary marketing executive nor do I play one on TV. But I am a tech geek; and, in previous roles, I had the opportunity to collaborate with other leaders to develop a meaningful secondary marketing strategy. So, what did I learn in the process? Well, the first is this: unless you are part of the secondary marketing team, you may not know, much less understand, a great deal about what happens in the secondary and capital markets areas. For most, rate sheets are magically created and distributed, loan officers can demonstrate product and pricing comparisons to their customers, and they are able to lock their pipeline. Loans are re-priced, secondary analysts run comprehensive best execution analyses for optimal loan delivery, and then those loans are sold to investors, yielding the highest economic benefit. Say what? For someone unfamiliar with secondary and capital markets workflow, the above paragraph sounds like a bunch of words strung together, right? Let me break it down for you and define some of the scope of secondary marketing. In doing so, I will then be able to showcase some
60
www.MortgageWOMENMagazine.com
of the innovations driving the technology evolution that will transform this space. These innovations will drive growth, increase profitability in a compressed margin environment, and improve the overall mortgage process in 2021 and beyond. First, I should probably provide a definition for what the secondary and capital markets are and are not. In the simplest of terms, the transaction (loan) between the customer (borrower) and the lender takes place in the primary mortgage market. In contrast, the secondary mortgage market is the marketplace where home loans and servicing rights, individually or bundled together, are bought and sold between lenders and investors.
Make sense? Both areas, primary and secondary mortgage markets, have benefitted from a tremendous amount of digital transformation and
