Revolutionary Rate Alerts!
Rate Alert is only MBS service in the market that allows you to enter actual lender re-prices and systematically adjust your settings to consistently
beat lock desks. This revolutionary concept is the most profit enhancing feature we offer. Our Simulator allows you to track up to 3 lenders simultaneously.
Just enter your lender name and actual re-prices at the exact time you received them and click “Simulate” and to how well your current settings performed
that particular day. Then you can scroll back in time, day-by-day to examine how these settings would have protected you over a period of time. Adjust
the Alert Controller Settings at the top of the page and “Re-Simulate” to dial in your settings. There’s no other way to scientifically dial in your service
than with the Rate Alert Simulator.
AM Tracking Quotes: Your Most Critical Setting
Your AM Tracking quote is your pricing “starting point” each day and gives you coupon pricing relative to the opening price (8am EST). Your Tracking Quote will be
defaulted to 9:30 AM EST. This is generally when most lenders issue their morning pricing. But you can change this to coincide with the given behavior
of any particular pricing desk in your Alert Controller. What makes the AM Tracking Quote so critical is actually quite simple. If a lender issues pricing
at the same time as your AM Tracking Quote, subsequent market changes from this point forward in the day should offer the best indication how likely they
might re-price and in which direction.
Movement Alert Triggers: Fine Tuning Your Alerts
Basic and Executive members can set their Instant Re-pricing Alert tolerances in the Alert Controller or in the Alert Simulator. Some Originators want
wish to be Alerted when pricing is at risk of moving by only .125 in fee while others are only interested in being notified when pricing can potentially
move by .25 to .375. Adjusting your "Instant Alert Trigger" is quite easy to understand. Bond pricing is presented in hundredths or "Basis Points" (bps)
while lender pricing generally moves in 1/8ths. 1/8 is equal to .125, 1/4 is equal to .25, 3/8 is equal to .375, 1/2 is equal to .50 in pricing and
so on. Conversion to Basis Points is very easy to understand. Take your lender fee pricing and simply move the decimal 2 places to the right and you
have the equivalent in bps. This means 1/8 in fee movement (or .125) is equal to 12.5 bps. So if you'd like to be Alerted whenever MBS pricing moves
enough to affect lender pricing by .125 in fee, you would select 12 bps as your Trigger. If you want to be alerted when bond pricing moves by .25 you
would select 24 bps. Sometimes it takes a bit of fine tuning to get your service exactly where you want it, but the system is designed to be as sensitive
as you want with the benefit of instant notification.
Beating Specific Lock Desks
If you're not beating a specific lock desk, don't be discouraged. Remember; lender pricing is managed by human beings. Some lenders will be slow to
re-price for the better if they are near operational capacity and they might be quick to increase for the same reason and so on. Conversely they may
lower pricing quickly or be slow to increase if they are trying to fill a funding commitment.
The first thing to remember is that your AM Tracking
Quote is your most critical setting in your Alert Controller. Again: This is your reference point for all future MBS movements that day. If you start
Tracking at the wrong time of day, even if you’re set at 12 bps you can still miss a lender re-price. And just because you receive rate sheets at a
certain time of day, that does not mean this is when they set their pricing. Members are encouraged to experiment with earlier AM Tracking Quotes and
increase or decrease your Trigger settings. Chances are you'll be able to beat your lock desk consistently after a week or 2 of testing and changing.
The bottom line is that you need to understand that if you're receiving Lock or Float Alerts, the market is moving and you need to beware!
Imperfect Science
Predicting any given lender's pricing all the time is impossible. Lock desks are managed by humans and every lender has different pricing goals and
hedging practices. So you might find some lenders acting inconsistently once in a while as compared with your settings but rest assured when you get
an alert, the market is moving and you need to prepare yourself. Don't leave your pipeline to chance.
CLICK HERE to arm yourself with Rate Alert today!
