The Pipeline

The most recent Fed meeting extended the timeline for potential easing of rates further into the year, while a single monthly drop in CPI led to a substantial short-term rally. While we await further clarity on the economy and the Fed’s reaction to emerging changes, we continue to be in the two-sided risk world we have discussed in previous articles. In this edition of the Pipeline, we feature two articles.

Problem: The current market for mortgage data is decentralized and presents barriers and expensive inefficiencies that make it difficult for the market to evolve by aggregating and adding important new data.

Solution: A Mortgage Data Exchange (MDE or Exchange) that aggregates all relevant data into an infrastructure designed to protect privacy while making integrated data and analytics appropriately available to counterparties.

One of the enduring lessons of the 2007 financial crisis is the enormous damage that poor mortgage lending standards can inflict on all levels of the economic system. Waves of insolvency of century-old financial companies, soaring unemployment, frozen debt markets and, worst of all, the damage to individual borrowers in the subprime and reduced documentation markets who were allowed and encouraged to borrow well beyond their means. This illuminated a gap in the mortgage ecosystem that there was no federal lending standard.