Clear to close, ready to trade: Turning better mortgage data into better deals

[00:00:00]  Narrator 
MPA Talk- The American Mortgage Professional Podcast. 

[00:00:12]  Matt Sexton 
Welcome to MPA Talk, where we bring industry leaders in to discuss topics that matter to mortgage brokers. I'm Matt Sexton, mortgage journalist here at MPA Today. Our topic is mortgage data and how you can turn better mortgage data into better deals. To discuss this topic, I'm grateful to be joined on this edition by Anthony Bechara and Mike Margolf, both senior Managing Directors of Lending and Capital Market Technologies at SitusAMC. Anthony and Mike, thank you so much for joining us on this edition of MPA Talk. 
[00:00:40]  Mike Margolf 
Happy to be here. Thanks for having us. 

[00:00:42]  Matt Sexton 
Let's start off with Anthony with the first question. When leaders say they want to make the deal, where do warehouse finance and secondary market execution most often break down behind the scenes? 

[00:00:53]  Anthony Beshara III 
Most problems occur across, you know, a variety of different areas within financing and secondary market execution. Some of those areas include collateral data quality, document perfection, borrowing-based calculations, margin call management, hedging, secondary, other secondary market transactions, loan delivery to investors, readiness for securitization, et cetera. These are all areas where technology and services play a huge role in terms of being able to help customers execute with precision, accuracy and timeliness. Having spent 21 years in the banking world before transitioning to the technology side of this business, all of those things resonate very well with me. And in terms of all of those items I mentioned, and the time sensitivity and the criticality of those items as it pertains to whether it's the banker or the lender, the financier, the originator or the investors. At the end of the day, those clients that are seeking liquidity care mostly about ease of use. Pricing is a big component, but beyond that, I care mostly about ease of use, speed to liquidity and confidence in funding. And you know, those are the items that we really try to focus on and strive to differentiate ourselves here at SitusAMC in terms of our technology products and the services that we deliver to customers. 

[00:02:42]  Mike Margolf 
Matt, I'll just echo what Anthony said there. Let's all pick it up on it. From a whole loan perspective or MSR trade perspective, breakdowns often occur. Whether it's like data quality, whether it's due diligence, document readiness, collateral perfection, all these things impact speed to execution and trade, right? Poor vendor, poor partner choices. How you choose to interact with your counterparty can increase dwell time for the sell side. That introduces margin risk, capital markets execution risk. Ultimately better data document workflows, better visibility on operational workflows by having capable technology to power those things can materially improve transaction economics, reduce frictions in a trade or warehouse funding event. 

[00:03:34]  Matt Sexton 
Anthony, I have a question specifically for you. From a warehouse finance perspective, what gives a funding partner confidence that a lender has control over its collateral, pipeline and liquidity? 

[00:03:46]  Anthony Beshara III 
Yeah, you know, confidence comes from technology process. The people that are working collectively, collaboratively, do they have the experience and the knowledge in order to execute a financing, you know, bring a deal together, a financing, a trade, a whole loan trade, a securitization, you know, you really need all of those components working together and in sync. It's really critical, you know, from a bank's perspective to have the appropriate controls in place to meet regulatory or accounting or credit requirements. And as a customer utilizing technology that has a proven track record, has the use cases built into that technology and then also has the ability to provide additional controls via, you know, edit checks and other types of sub-limits and concentration limits and collateral valuation rules and things like that embedded into the technology as it may be specific to that facility or that customer. Those are things that clients rely on us as a technology and service provider and, you know, we believe are those fundamentals in order to provide, you know, confidence to our consumers. 

[00:05:22]  Matt Sexton 
And when you're working on deals, obviously you're trying to avoid slowdowns. I want to get Mike's thoughts on this. What are the most common data or document issues that slow down secondary market execution, investor delivery or even transaction management? 

[00:05:36]  Mike Margolf 
Oh, great question. People say time kills deals, but what drives that time is really the underlying pain points and the things that transaction managers and secondary market trading really ends up killing those deals. Could be missing fields, it could be missing documents, it could be a cumbersome operational process. But you know, things like inconsistent data or missing attributes can impact, you know, how a due diligence provider might perceive the loan or, you know, demands for trailing documents that are necessary to cure those exceptions and ultimately give a buyer buy-side confidence that they're buying what was represented or what's within their buy box or within their risk tolerances. So you know, that inconsistent data, those missing attributes, those missing documents often can hold up deals or, you know, on an individual loan or a bulk trade more broadly. But non-agency transactions, MSR transactions, the ability to manage images, file movement and interact with your vendors efficiently, effectively so you can not just execute on the trade but transition that into your asset management activities post settlement efficiently and effectively is also part of the game. And that requires strong systems of record, built-in vendor partnerships that can automate document and diligence workflows. And to Anthony's point earlier, validate data across multiple sources and help you identify the best available data so you can price more effectively, so you can move these things into actionable events post purchase. Cleaner data, cleaner documents ultimately accelerates transactions, improves confidence and, you know, to Anthony's point earlier again, you know, price often wins. But ultimately people are gaining more and more appreciation for the execution risk and the operational burdens. And that can be a differentiator in and of itself as well in the secondary market trade. 

[00:07:51]  Matt Sexton 
Talking more about that market, specifically the current market, I want to get both of your thoughts on this one. We'll start with Mike. Mike, how has the current market changed the standard for what you would consider to be good enough data? 

[00:08:01]  Mike Margolf 
That's a great question. I would argue that we shouldn't have to settle for B minus data for B minus documents. In a secondary trade, I think there's a temptation to compromise, especially in like say a seller's market where speed to execution might be valued at some level more on a whole loan transaction. But with the right tooling, the right people and the right processes in place, you don't have to settle for B data. You can really seek A plus data on every single transaction, still execute efficiently and use tools that again can understand, help you understand what your best available data is, whether it's a prime jumbo, non-QM, RTL, consumer asset classes. And you can avoid that pressure to loosen guidelines or accept weaker data to facilitate deals. Right partners, right tools allow firms to execute quickly and not compromise there. So the goal really should be faster execution without sacrificing that data quality or increasing operational risk. 

[00:09:09]  Matt Sexton 
Anthony, do you have some thoughts on that as well? 

[00:09:12]  Anthony Beshara III 
Yeah, the standard of good enough data, it really depends on kind of certain markets and certain conditions with respect to those markets. So you look back to a few years ago when interest rates were really low and volumes were really high, you kind of have this sort of like people are just sort of up to their elbows in applications and fundings and origination volumes and, you know, getting deals done and you sort of, you're kind of drinking from the fire hose, so to speak, right. As the rate environment has risen and, you know, agency volumes have sort of tapered off and, and you know, if you remember a few years ago, there's a period where volumes dropped off quite significantly, were sort of back to, you know, kind of higher volumes again today. But that's, it's a slightly different market dynamic in the sense that the push, right, has been into sort of broadening the non-agency products, the non-agency products that are originated, the non-agency products that are ultimately financed and then ultimately securitized. Right. Or subsequently financed and ultimately securitized. And so then from a technology perspective, right, you have to sort of adjust to, you have to adhere to these different collateral, you know, asset, mortgage-related asset classes. And you know, so one way of doing that is creating, you know, various collateral subtypes within the application. The other way is by trying to standardize data sets across multiple mortgage-related assets. Right. And a lot of institutions are originating, financing and buying loans that, you know, are very different in nature than what they had bought, you know, five years ago, what they had bought historically, right. And we've seen that by way of, you know, many new entrants in the market, both on the financing and ultimately, the types of institutions that are buying loans and then the types of loans that those institutions are financing and buying. So it's really been a trickle down, right? And I would say as that box kind of widens, you sort of go down the spectrum of what may have been acceptable, right, in these high volume periods where you were waiving in agency loans, right, become, you know, under greater scrutiny. And there's, you know, there's a lot more in terms of regulatory and compliance requirements in place today than there were, you know, five years ago, than there were ten years ago. And so that has also taken us down this path of making sure that you have really good data and making sure that your technology can support that data. And then conversely, that you have data sets and other processes in place so that you're not sitting there kind of mapping data and trying to resolve data issues or discrepancies. Because again, it goes back to the points that we made earlier at the top of the podcast of ease of use, timeliness, liquidity. Those are the margins where a lot of our customers are competing. 

[00:13:03]  Matt Sexton 
Let's talk a little bit about how problems early in a transaction could cause problems later. I want to start with Anthony on this one, but I want to get both of your thoughts. Anthony, what types of problems slip through the cracks during origination and cause problems later at funding, sale, transfer, even securitization? 

[00:13:21]  Anthony Beshara III 
Things that slip through the cracks, I would say have, that has sort of been largely the focus of technology platforms, technology solutions, et cetera. Right? Because you look back at sort of the history of this business, it's been, it's been very paper-intensive, manual, process-driven, et cetera. Right. And those types of limitations are ultimately can be an impediment to how you close your pipeline, i.e., production, i.e., volumes, et cetera. Right. Both sides of these equations, you're looking at institutions that at the end of the day are chasing volumes, they're chasing revenues, which ultimately leads to, you know, your net interest margin, whether it's an origination platform, whether it's a bank that's providing financing to these originators or even investors on the other side. Right. It does amaze us even in 2026, where, you know, we come across sort of a prospect or somebody that is looking for a solution and we kind of sort of look under the hood. It's, it's — you have a limited number of people dealing in spreadsheets and emails. This creates a tremendous amount of risk, right, for the institution, for the business, for the processes involved. It's very susceptible to human error, mistakes. It's not scalable. This is a business where execution really matters. Execution can define you as a warehouse lender, can define you as an end buyer, can define you as the technology and service provider. So there is a lot of value in terms of being able to deliver a solution for customers that has the appropriate controls. It is, you know, an industry-standard platform, you know, a defensible system of record, if you will. But these are the types of things that, you know, help sort of reduce, you know, mistakes or prevent items from slipping through the cracks. 

[00:15:45]  Mike Margolf 
You know, I'll take it a little bit different way, like, and 100% echo what Anthony's shared. But would you rather know, I guess, that an asset is compliant? Would you rather understand your transfer of liability upfront at the time of purchasing an asset, or do you want to find out later when you have loss severities or maybe hit an EPD threshold and you have to put the loan back and then absorb some of those operational risks. I think earlier lifecycle visibility and using the right tooling to do that, whether it's in partnership with your due diligence provider, your compliance provider, within your own systems of record, helps you answer those early questions around compliance and potential loan performance issues that might come down the road and that can be reflected in your pricing. So how you kind of synthesize that information, bring it all together to make better and informed decisions, is kind of core to the products and services we certainly offer here at SitusAMC. But it's really what everyone's striving toward, really understanding what they're buying. Have the best available information that they have to inform their pricing and their purchasing decision and that can inform and that can accelerate your takeout on the back end as you hold these assets and you look to sell or securitize on the back end. To your original question, right — if you have the good data up front and you have really strong tools to bring in your servicing data, to bring in your collateral data, you know what your impediments to liquidity are and that helps you make informed portfolio management decisions and ultimately drives stronger lifecycle management to, you know, reduce all those downstream friction, whether that ends up being a repurchase from your seller or, you know, ultimately a takeout in the form of a loan sale or securitization. 

[00:17:51]  Matt Sexton 
I have a question for both of you about the technology side of it and really where the strongest benefits come from. We'll start with Anthony with this one. Once again, where can technology create the biggest improvement, do you think? Is it faster funding, fewer exceptions, better investor delivery, cleaner servicing transfers, or even stronger portfolio oversight? 

[00:18:12]  Anthony Beshara III 
Yeah. So, you know, there's a number of things in terms of when you think about technology and how that creates improvement. One of the things that slows down our customers is fragmented information, manual processes, reactive workflows. There's really an emphasis on, you know, real-time data, real-time reporting, you know, real-time workflows. That's, you know, kind of where the world is trending towards. You have, you know, AI and other automation features. I mean, automation features and customization features have existed in Promera for a number of years. But as many of us are aware now, we're now at a place where it's kind of universally process flow, types of jobs and certain elements of technologies are really shifting towards AI. Some of the major areas that we're looking at is updating code and development efficiencies and how you improve client-facing user experience. So some of the things that we're focused on is well, how do you address those items in an application that currently exists? And as I mentioned, you have customization, you have automation built in. The next layer of that is as we sort of continue down this evolution of like, how do you continuously get, you know, faster fundings and faster processes and real-time data? Is, you know, how are you utilizing AI in the context of how do people use these types of tools today, whether it's Google Search or a search in an application like ChatGPT or Copilot or Claude or one of these. And that's how we're starting to think about, you know, the future of our platforms, right? Our customers should be engaging and interacting with our technologies similar to the way that they search and query and ask questions and receive digestible information and responses through these platforms, right? So we're starting to think through the lens of our platforms in a way have to mimic the way people interact with other technologies. AI should help clients become, you know, more scalable, more efficient, more profitable. And those are, you know, when we think about things, that's the lens that we look through to evaluate. As you look to sort of implement AI strategies and solutions, you have to think about what you're implementing, how it adds value to the process or the business, how the customer will interact or engage with that tool. And you constantly have to think about, you know, testing, training the AI tool, reviewing it, make sure that it's not just sort of like some careless adoption, but that you have the appropriate controls in place. Like, it can be very powerful. And we've seen some things as just a part of being in some of these technology-oriented forums and conferences where there's, there's very powerful technology out there and we believe our systems are on that same level. However, there is that constant, you have to compete to have that edge. And we believe the edge is, as I mentioned, is being able to apply these things in the way of how people interact with them today or how they're learning how to interact with them today and how you implement, how you test, how you train, so on and so forth. So, you know, that's where, you know, that's where we see kind of the biggest improvement. 

[00:22:27]  Mike Margolf 
You know, like we talk about AI, I mean, what that's evolving into is at some level creative destruction, right? We're all advancing, we're all seeking ways to become more and more efficient with what we're doing both within, to replace existing applications, enhance existing applications, things like that. But I would say, like one of the things to your question, where can we see the biggest improvement through technology? Certainly there's advancing technologies. We're continuing to invest heavily in our technologies and service to our clients. But a lot of our client footprints, what we observe is many distinct systems that take a lot of time, a lot of energy to maintain and to integrate. And that takes away from your secondary market execution or your warehouse execution, right? Like secondary market execution is so simple, right? It's about clean data, complete documents, you know, happy investors. But you know, naturally it shouldn't take seven systems, twelve spreadsheets, and someone in your middle office named Linda. Who knows where everything is, right? It's really, how do you bring those together more seamlessly and how do you do it across your business partners, whether that's your seller data, whether that's your servicer data, your custodian, how do you bring this together? Consolidate systems to power those more automated workflows, I think is a big theme right now and one that we're helping clients execute on. 

[00:24:07]  Matt Sexton 
As we get ready to wrap up today, obviously we always end these type of podcasts with a look ahead, and certainly it's never an easy exercise, but we're going to try to do that anyway, especially this year. Just trying to, you know, just trying to lay out there that none of us have a crystal ball. But we want to take a look and try to see what's going to happen going forward. So we'll start with Anthony with this final question. As you look ahead, what market trend should warehouse lenders and secondary market professionals be watching most closely? 

[00:24:37]  Anthony Beshara III 
So we look ahead in market trends. There's a number of items that come to mind. To start though, I think one of the things that inevitably you hear as when you're dealing with technologies, when you're dealing with operations and processes and you're dealing with wide, you know, widened range and a large number of financial institutions, inevitably you hear from people like you sort of question something. It's like, well, this is the way we've always done it, right? And that's one of the things that like just personally sort of drives me a little nutty. Like you should always do something with a purpose and you should always be strategic in how you operate, right? And so some of the areas that you have potential for the highest impact, you know, unified data, continuous collateral monitoring, AI-driven solutions, predictive liquidity, and one of the things that many customers ask for, integrated execution workflows and given kind of SitusAMC, where we sit in the ecosystem and the number of products and services that we offer to customers, right? That is really paramount. It does become sort of business can be more bifurcated when you have multiple vendors across multiple products to be able to engage with a strategic partner that can provide a wide suite of technology product offerings and services. That's where you start to sort of gain a lot of efficiencies. And I think, you know, from a looking ahead as you start to then apply some of the themes that we talked about earlier in this podcast of AI, the way you implement it, how customers scale, how they look to improve profitability, how they look to operate more efficiently, reduce costs of operation. The focus should be thoughtful and it should be strategic. It shouldn't be, hey, we want to apply AI or we want to do X, Y or Z without thinking through what are the benefits, how does this impact my customers, how does this improve process and so on. So I think we are at the forefront of a significant modernization in technology and service processes. We talk about it a lot internally. You know, some of the things that we do for customers today we may not be doing two, three, five years from now. And so we are constantly looking through the lens of where is this business going? Where is the technology going? What are our clients looking for? What are the questions that our clients ask us? What are our competitors doing? We're constantly looking through that lens so that, you know, ideally we're sort of trying to always kind of stay ahead of the curve. And we've had a very robust, we've had a very successful, very robust business here at SitusAMC. We're very blessed and fortunate for, you know, for that and the work that we put in to build that and, you know, the resources and the team that we've assembled. But a lot of this, the future of our success depends on, you know, how we sort of navigate these trends, you know, that I listed. And like I said, I mean there is no playbook for this. Right. This is where we're really in uncharted waters here. And this is, this is really, you know, there's a lot of tools out there that are really changing the playing field and the way a lot of the execution happens in this business. And you know, we continue to stay at the forefront of, you know, that, that change and that modernization. 

[00:28:35]  Mike Margolf 
Operators in this space talk about what people, process and technology, right. We've talked a lot about process and technology and having the tools there. But if you look at that through the lens of kind of the macro environment and secondary markets, one, you have strong growth in non-QM, DSCR, non-agency asset classes. You have strong demand there from institutional investors. You have a home equity second-lien product, you know, that has really grown quite rapidly over the last couple of years. You have, you know, lock-in effects that, you know, with homeowners that, you know, changes collateral behavior versus what we may have observed in the past. And you kind of have, you have credit performance largely remaining strong. And so when you kind of couple all those things and Matt, I don't have your crystal ball on rates either, but there's, we're building for different market environments, not just for the now. And you know, and what we talk about with our clients is technology that can tackle different trends, angles and services that can power our clients' business through different market cycles and technology enhancements that are, you know, bridges between today and really tomorrow's market opportunity. Whether that's continued second-lien expansion or a change in the GSE footprint or a different, maybe a broader credit event, it's hard to predict specifically what's out there. There's a lot of different takes on it. But having flexible adaptive technology and vendors and tech that can move with you is critical to our clients' success and SitusAMC's success. 

[00:30:30]  Matt Sexton 
Sounds like SitusAMC is getting ready for anything, which is probably the best way to handle looking forward is to be ready for all different possibilities. So it's exciting as always to get to catch up with both of you to hear the latest on what's going on with SitusAMC. And that's going to wrap things up for this edition of MPA Talk. I want to thank our guests once again and thank you for listening. I'm Matt Sexton saying so long and we'll talk to you again next time. 

[00:30:57]  Narrator 
MPA Talk. You can listen to the latest episodes on Apple, Spotify, Amazon and all major listening channels. Just search for MPA Talk.