| Mortgage Pooling & Mortgage Backed Securities

Mortgage Backed Security Software
& Mortgage Pooling Software

Create CMHC mortgage-backed securities with Portfolio Plus.

To improve liquidity, earnings, and return on assets, financial institutions, like banks, trust companies, and loan companies, often create pools of mortgages that can be sold to investors as mortgage backed securities (MBS). Although MBS received a tarnished reputation during the financial crisis in 2008 many of our customers actually increased their MBS activity (more on this below). Furthermore, our customers remained very healthy from a liquidity, earnings, and growth standpoint.

Why did our customers remain so healthy during the financial crisis while many other financial institutions had to retreat? There are many answers. Sound judgment and adequate regulation are a few of the answers that come to mind. However, SIT's Portfolio Plus banking software played a role as well.

Although this web page focuses on Canadian-centric securitization vehicles, SIT's Portfolio Plus banking software is not limited in this way. SIT has customers in Canada, the UK, Ireland, and the Caribbean. Using Portfolio Plus, virtually any asset (e.g. car loan, agricultural loan, etc.) can be securitized.

How did our customers overcome the financial crisis?

Here are three ways SIT's Portfolio Plus banking software helped our customers face the financial crisis:

  1. LIQUIDITY w/deposits: The Portfolio Plus deposit management capabilities allowed financial institutions to rapidly increase their deposits, as required, while other financial institutions (who relied solely on Asset Backed Commercial Paper) had to retreat.
  2. LIQUIDITY w/MBS: Portfolio Plus enabled financial institutions to create pools of mortgages that would meet with the strict criteria of the Canadian Mortgage and Housing Corporation. (It seems investors did not shy away from government insured, mortgage backed securities).
  3. LIQUIDITY w/MBS & CMB: SIT customers who created pools of CMHC insured mortgages for sale as mortgage backed securities benefitted, indirectly, from increased sales of Canadian Mortgage Bonds by the Canadian government during the financial crisis. (This strategy worked well.)

Note: Portfolio Plus enables securitization of virtually any asset—not just mortgages.

Create a pool of mortgages that can be insured.

Users of Portfolio Plus can create pools of mortgages that meet the criteria of the CMHC (or other insurance program) and are suitable for sale to investors in today’s risk averse market.

An overview of the steps required to create a pool of mortgages that can be securitized, is outlined below.

Mortgage pooling.

Step 1: Create a temporary pool.

Portfolio Plus users first create a temporary pool and name that pool (e.g., “P1”) and then use Portfolio Plus to select various criteria so these mortgages can be associated with the named pool.

Examples of that selection criteria include:

  • Advance Date (from/to)
  • Maturity Date (from/to)
  • Rate (lowest/highest)
  • Amortization (to/from)
  • Loan/Value (to/from)
  • Payment Frequency (monthly, bi-monthly, semi-monthly, etc.).
  • Compounding frequency (semi-annually, monthly, quarterly, annually, etc.)
  • Loan Type
  • Lending Type (loan, mortgage, line of credit, equity line of credit, etc.)
  • Class
  • Security Type (none, property, vehicle, or other

Step 2: Issue the pool.

Once the user is satisfied with their selection, this pool is moved to a “new company” or a “branch” so it can be tracked separately. The user then selects an Issue Date as well as a Settlement Date.

Step 3:Modify pool data.

The user reviews and modifies, if necessary, the Insurer Pool #, the Description, the Issue Date, and the Settlement Date.

Mortgage pool maintenance & reporting.

Users can add or delete loans from a temporary or Issued Pool.

Various reports are available to the users including:

  • Pool Weighted Averages
  • Pool Duration
  • Pool Trial Balance

Export pools of mortgages to mortgageHub®.

Portfolio Plus works well with mortgageHub® (available from TAO Solutions) which is a fully integrated mortgage loan funding, securitization, and whole loan portfolio management system built for the Canadian mortgage industry. It’s functionality includes:

  • The definition of multiple pool types
  • Accomodations of variable interest rate mortgage pools
  • Specification of key mortgage pool parameters (rates, dates, security types, etc.)
  • Identification of all possible pools meeting specified criteria
  • Automatic removal of mortgages from marked pools that no longer meet the pool criteria
  • Standard reports and extracts (e.g. CMHC, etc.)
  • Merging of pools
  • Transfer issued pools to mortgageHub®

Need more information?

Better mortgage software, by itself, isn't all you need to win in today's competitive lending market. You need a source of deposits, better liquidity options, and a complete banking software platform to ensure continued growth. The Plug-In Banking TM capability of Portfolio Plus ensures that you can start with only the modules you need today and then expand your functionality later as you grow. If you have any questions please do not hesitate to phone us at 905-640-0808 and ask for Domestic Sales (within Canada) or International Sales (outside of Canada).

Note: SIT Portfolio Plus is a trademark of Strategic Information Technology (SIT). mortgageHub is a registered trademark of TAO Solutions.

 

Questions?   Call us.

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647-496-6202

Monitoring & Reporting



This page was created and/or refreshed on March 21, 2017 @ 14:41:40
by Strategic Information Technology (SIT) Ltd., Stouffville, Ontario, Canada
The page subject is: Mortgage Backed Security Software, Mortgage Pooling Software