WORKING DRAFT — Pending review by Lisa (CEO), Greg (President), and Jay (Operations). Not approved for publication.
Every Basis Point. Every Loan. Every Day.
This is the flagship. This is where the money is made.
Every loan that closes on your desk faces the same question: where do I deliver it? Which investor. Which commitment. Which delivery window. Which servicing strategy — retain, release, or split. Buy up the guarantee fee or buy it down. Deliver this month or roll to next month.
Get it right, and you capture full economic value. Get it wrong — even slightly — and you leave money on the table. Not on one loan. On every loan.
Most desks make these decisions with a combination of experience, rate sheets, and a pricing spreadsheet someone built four years ago. That spreadsheet probably works. It probably gets you close. But "close" on a $500M pipeline has a dollar sign in front of it.
Secondary Manager replaces "close" with "optimal."
Best Execution — The Centerpiece
Best Execution is not a price feed. It's a decision engine.
For every loan in your pipeline, BestEx evaluates every permutation of investor, instrument, delivery window, and servicing strategy. Not just the base price — the total economic value of each path:
- Base pricing from investor rate sheets
- Feature adjustments — loan-level price modifiers for LTV, FICO, property type, documentation type, occupancy, and dozens of other characteristics
- Servicing value — the economic difference between retaining and releasing servicing, including buy-up/buy-down optimization
- Warehouse income — the carry earned while the loan sits on your warehouse line
- Finance costs — the cost of funding the loan through delivery
- Delivery window economics — the price differential between delivering this month versus next, accounting for all of the above
BestEx ranks every scenario and surfaces the optimal path for each loan. But here's what matters most: it also shows you the dollar value of the difference between the best option and the second-best option. So you know exactly what each decision is worth.
What That Looks Like in Practice
A mid-size lender with a $500M annual pipeline runs BestEx daily. On a given day, they have 150 loans ready for commitment. BestEx evaluates each loan across 8 investors, 3 delivery windows, and 2 servicing strategies — that's 7,200 scenarios, ranked and optimized in seconds.
The average improvement from optimal investor selection: 3–5 basis points per loan.
On $500M, that's $150K–$250K per year in additional revenue — from a decision the desk was already making every day, just making it with better information.
And that's the conservative case. For desks that haven't optimized servicing strategy or delivery window timing, the improvement can be significantly higher.
Trading — Full Lifecycle Management
Secondary Manager handles the complete trade lifecycle from creation through settlement:
- Trade creation for six instrument families: MBS, whole loan mandatory, whole loan best efforts, futures, treasury, and eurodollar — plus options
- Designation — assign pools, securities, pair-offs, and AOTs (As-of-Trades) to commitments
- Cash grid management — pricing grids that map note rates to prices for whole loan trades
- Rollover tracking — when a trade needs to be extended, manage the pair-off of the original and creation of the replacement
- Tolerance calculations — verify that delivered amounts fall within commitment tolerances before settlement
- Settlement — complete the trade, move loans from active pipeline to shipped status, and reconcile proceeds
For desks doing whole loan flow business, Quick WL Trade creates the pool and trade from selected loans in a single operation — cutting a multi-step process down to one.
Pooling — Constraint-Based Optimization
Pooling is where loans get assembled into deliverable packages. The pooling engine uses 12 eligibility criteria sources — layered together — to determine which loans qualify for which pools:
- Default criteria and guarantor rules
- Master agreement and commitment constraints
- Marketing program requirements
- Instrument eligibility
- Pool-specific rules and note rate spread limits
- Investor requirements and securitization rules
The engine runs a multi-pass allocation process: first pass fills existing pools, second pass allocates remaining loans to new pools, third pass rebalances to optimize fill rates. Constraints can use count, sum, average, or weighted-average functions with configurable limits.
Why this matters: Under-filled pools mean pair-offs. Over-constrained allocation means missed delivery opportunities. The pooling engine finds the allocation that satisfies all constraints while maximizing delivery value — including buy-up/buy-down servicing strategies that can add meaningful basis points to each pool.
Bid Packaging — Competitive Bulk Sales
For correspondent desks and bulk sellers, the bid packaging module lets you assemble loan packages, distribute them to competing investors, collect bids, and compare weighted-average pricing across instruments and servicing options.
Bid packaging uses the same pricing infrastructure as Best Execution — so the analysis you run on bulk bids is consistent with your flow business economics. No separate pricing model, no reconciliation between systems.
By the Numbers
- 3–5 basis points average improvement from optimal investor selection
- $150K–$250K/year in recoverable value on a $500M pipeline
- 6 trade type families with full lifecycle management
- 12 eligibility criteria sources in the pooling engine, layered for constraint satisfaction
Who Benefits
Secondary Marketing VP: "I can prove to my CFO that we're capturing maximum value on every loan. BestEx gives me an auditable record of why we delivered each loan where we did — and what the alternatives were worth."
Trader: "I see the best execution path for every loan in seconds, not hours. And when I need to make a judgment call — rolling a trade, adjusting servicing strategy — I have the numbers to back it up."
Analyst: "I used to spend half my day building pricing comparisons in Excel. Now BestEx does the comparison across every permutation, and I spend my time on the edge cases that actually need human judgment."
Executive: "Best Execution is quantifiable, auditable, and defensible to our board. When someone asks 'are we getting the best price on our loans,' the answer is documented on every trade."
The Differentiator
Other systems show you prices. An investor rate sheet shows you prices. A Bloomberg terminal shows you prices.
PowerSeller shows you the optimal decision — which investor, which delivery window, which servicing strategy, and the dollar value of that decision versus every alternative. It accounts for feature adjustments, servicing economics, warehouse income, finance costs, and delivery timing — all in a single, ranked analysis.
It's not a price feed. It's a profit engine.
And it's been in production for 15+ years, refined through rate cycles, market disruptions, and the daily reality of secondary marketing desks making real decisions on real money.
Want to see what BestEx would find in your pipeline? Let us run your last 12 months of trading data through Best Execution and show you what optimal looked like. →