Tradewy's blockchain technology is utilized by Novaprime for a mortgage hedging solution
In a recent development, mortgage technology firm Novaprime has partnered with Tradeweb, a global operator of electronic marketplaces, to enhance its hedging solution for mortgage lenders. The partnership aims to automate mortgage risk management, but the specific role of blockchain technology in this process remains unclear.
Novaprime creates a smart contract for every mortgage originated on its Loan Intelligence platform. When a mortgage lender enters into a contract with a home buyer, they can immediately hedge the lending by selling a TBA contract to lock in the interest rate. However, the partnership between Novaprime and Tradeweb does not explicitly mention the use of blockchain technology for automating risk management or facilitating hedging in the TBA MBS market.
Tradeweb is known for its significant presence in the fixed income sector, with a major focus on the TBA mortgage-backed securities (MBS) market. Last year, Tradeweb saw average daily volumes of $248 billion in the TBA MBS market. The TBA market involves the trading of Agency MBS before the specific mortgages are known.
Meanwhile, Figure Technologies, another player in the mortgage technology sector, has been making waves with its blockchain-based mortgage registry. Figure Technologies has created an alternative blockchain registry for mortgages, challenging the monopoly of MERS in the United States. They have also set up a consumer-facing mortgage origination firm to demonstrate the benefits of using blockchain in the origination process. Figure Technologies aims to create a TBA-style market for non-qualifying mortgages.
In conclusion, while Novaprime and Tradeweb have partnered to enhance mortgage trading platforms, the specific role of blockchain technology in this partnership, particularly in relation to automating risk management or facilitating hedging in the TBA MBS market, remains unclear based on the available information. Further details about the technologies or methods used for risk management or hedging in the TBA MBS market by this partnership are not provided.
- Despite Figure Technologies' success in creating blockchain-based solutions for mortgage registries and originations, Novaprime's partnership with Tradeweb does not explicitly detail the integration of blockchain technology in their automated risk management and hedging processes for the TBA MBS market.
- Figure Technologies, by setting up a TBA-style market for non-qualifying mortgages, highlights the potential of blockchain technology in the mortgage and finance industry, a role that Novaprime and Tradeweb's partnership does not currently appear to address.
- Amidst the evolving role of blockchain and artificial-intelligence in the finance and energy sectors, the specific application of these technologies within the mortgage industry continues to reveal intriguing insights, with companies like Novaprime and Figure Technologies leading the way in innovation.
