Create a Loan Trade

View the "Trade Management: Loan Trades" Quick Reference Guide

To create a loan trade you need to search for eligible loans, apply them to a loan trade, and then create the loan trade details and pricing information.

Step 1: Search for Eligible Loans

  • The first step in creating a loan trade is to search for eligible loans. Follow the steps in the Loan Search procedure to enter search criteria and find loans that meet the requirements of the trade.

Step 2: Select Loans

  • If you searched from the Loan Search tab, select one or more loans from the list of search results, and then click Create Trade.

  • If you searched from the Loan Trades tab, you will select loans for the trade after you complete Step 3.

Step 3: Loan Trade Details

Details Tab

ClosedLoan Trade Information

  1. Type the Trade ID.

  2. Type or select a Commitment Date.

  3. Select a Master Contract # to add the trade to, if applicable.

  4. Type or select a Commitment Type and Trade Description.

  5. Enter the investor's name, Investor Trade #, and Investor Commitment #. The Commitment # is applied to the Secondary Registration tool for each loan.

  6. Add investor data, there are three ways to do this.

    • If you select a Master Contract #, the contract's investor data (including Pair Off Fee) is applied to the trade.

    • Click the Find icon (magnifying glass) to select an investor from the Investor Template list. This will also apply the investor's data (including Pair Off Fee) to the trade.

    • Manually add investor information.

  7. For Encompass 17.2 and later, if you manually enter a Weighted Avg. Bulk Price (Bulk Delivery must be selected to lock the lock icon), that price is mapped to the total price for each loan allocated to the trade. When you allocate a loan to the trade, the import file will only import a single column of loan numbers or manually entered loan numbers.

You cannot allocate a loan to a trade with a blank price in the manually entered WABP.

  1. Enter the Trade Amount and the Tolerance (allowed percentage variance) to the trade amount.

The Minimum Amount is automatically calculated by determining the dollar amount of the Tolerance and subtracting it from the Trade Amount. The Maximum Amount is calculated by determining the dollar amount of the Tolerance and adding it to the Trade Amount.

  1. If not already populated from an investor template, enter the percent value used to calculate the investor's Pair Off fee for trade deliveries that fall below the agreed upon amounts. The actual fee is calculated when entries are made on the Pair Offs tab.

  2. Type or select the Investor Delivery Date, the Early Delivery date, and the target Delivery date.

    • If the Investor's template information contains a number in the Delivery Time Frame field, the Investor Delivery Date will be calculated by adding the number to the Commitment Date.

    • The Investor Delivery Date and Target Delivery Dates are applied to the Secondary Registration and Shipping Details tools for each loan.

  3. Enter the Actual Delivery Date and Purchase Date when appropriate.

  4. In the Misc. Fee field, enter any miscellaneous fees.

  5. The Total Gain/Loss, Total Pair Off Amount, and Total Net Profit are calculated as loans are added to the trade.

ClosedSecurity Trade Information

If the loan trade is being included in a security trade, enter the security trade information in this section.

ClosedDetails Tab

  1. Select a Security ID for the trade from the dropdown list, or type the Security ID.

    • The Assigned Date field will be populated with the current date.

    • If you select the Security ID from the list or type the Security ID for an existing security trade, the remaining fields on the Details screen will populate from the selected security trade, and the field will be disabled.

  2. If you typed the Security ID for a security trade that has not already been created on the Security Trade tab, type or select entries for the Security Type, Program Type, Coupon, Price, and the date fields. When you save the loan trade, Encompass will create a matching Security Trade entry on the Security Trade tab.

ClosedDealer Tab

If a dealer is associated with the security trade, enter the dealer's information on this tab.

ClosedAddresses

In the Address section, click the tabs and, if contact information is not already entered, type the contact information or click the Address Book icon to import the contact information from your business contacts. We highly recommend you enter the contact information in the Investor template.

If a trade is shipping to an Assignee, enter the Assignee contact information on the Ship To tab.

Pricing Tab

ClosedBase Price/Detailed Pricing Grid

The Pricing tab defines the range of rates for the loans in your trade. Select the Simple or Advanced option from the dropdown list in the Base Price or Detailed Pricing Grid section to create your pricing options.

Loans whose rates fall outside of the Note Rate range on the Details tab will not be eligible for the loan trade.

ClosedSimple

Select the Simple option to create a Base Price table with a range of note rates and prices for the loans in your trade. Then create Buy Up/Down adjustments to price loans with rates outside the range in the Base Price table.

When you switch between the Simple and Advanced options, the data in each option is maintained. If you switch back to the other option, the data previously entered for that option is still available.

  1. Select the Simple option from the dropdown list on the upper-left panel.

  2. Click the New icon in the Base Price section.

  3. On the Add Pricing Data window, enter a Rate, and the Price for the rate (in basis points), and then click OK.

  4. Add additional rates and pricing to cover the range of rates in the trade in 1/8 point increments.

  5. To delete a rate and pricing entry, select the entry and click the Delete icon.

ClosedBuy Up/Down

The Buy Up/Down fields are used to price loans whose rates fall outside of the range covered in the Base Price table.

  1. Enter the Rate Adjustment increment that the Buy Up and Buy Down values are based on. This value is typically 0.125.

  2. In the Buy Up field, enter the percent that is added to the base price for each Rate Adjustment increment above the highest note rate in the Base Price table.

  3. In the Buy Down field, enter the percent that is deducted from the base price for each Rate Adjustment increment below the lowest note rate in the Base Price table.

ClosedAdvanced

Select the Advanced option when working with loan trades that are associated with a Security trade. You can then create a Detailed Pricing Grid based on the security trade coupon price, enter additional fees that will be applied to the pricing, and create a list of pricing adjustments based on each loan's note rate.

When you switch between the Simple and Advanced options, the data in each option is maintained. If you switch back to the other option, the data previously entered for that option is still available.

  1. Select the Advanced option from the dropdown list.

  2. The Coupon and Security Price are populated from the entries in the Security Trades section on the Details tab. Type amounts for the Guarantee Fee and Service Fee (if you are retaining servicing).

  3. Type amounts for the Early Delivery Credit and Negotiated Incentive, if appropriate.

    These fields are optional, and are included in the Total Price for each entry in the table below.

  4. To create a table of pricing adjustments based on the Note Rate of each loan, click the Add icon and enter the following information:

    • Note Rate of the loan.

    • Buy Up or Buy Down amount for the note rate.

    • GNMA II Excess, if applicable.

    • Mandatory Adjustment, if applicable.

  5. Click Add Another and repeat steps 4 to add pricing adjustments for additional note rates.

  6. When finished, click OK.

    When a loan with a note rate listed on the table is assigned to a loan trade, the Total Price is populated to the Secondary Registration and Purchase Advice tools in the loan file if you select the option to overwrite the loan information with the trade information when you save and update the trade. For more information, refer to About Saving and Updating Trades later in this help topic.

ClosedMSR

For users that sell service retained loans, use this section to capture MSR by note rate. When Servicing Type on the Details tab is “Service Retained”, a MSR section is displayed on the Pricing tab. This section replaces the Buy Up, Buy Down, and SRP Table sections.

  1. Click on Add MSR.

  2. In the Add MSR Value Data pop-up window, enter a Rate and Value.

  3. Click OK to save our MSR value.

    Or

  4. Click Add Another to add another value.

ClosedPrice Adjustments

Apply adjustments from a template and/or create adjustments from scratch.

ClosedApply an Adjustment Template

  1. Click the Template button in the Adjustments section.

  2. On the Select Adjustments Template window, select a template.

  3. If you want to add the template data to the list of adjustments (rather than replace the list), select the Append template to existing data checkbox.

  4. Click Select.

ClosedAdd a New Adjustment

  1. Click the New icon in the Price Adjustments section.

  2. Type a percentage value for the Price Adjustment when the condition is met in the Price Adjustment field.

    • If the investor will pay the adjustment amount when the conditions are met, enter a positive number. If the investor will receive a discount, enter a negative number.

  3. Click the New icon, and then click the Find icon.

  4. On the Select Field window, double-click to select a field from the list. The list includes a default set of loan fields and any loan fields added to the Reporting Database.

    • Or, type one or more characters and click Find. The first occurrence of the characters in any column will be found.

  5. Select an Operator, enter (or select) required Values, and then click OK.

    • The Operator and Value define how the field will be used to define the adjustment. For example: Field ID= 1109 (Loan Amount), Operator = Greater than, Value = 250000.

  6. For compound filters, use the AND/OR button to indicate how the filters are applied. Use and when you want all the selected filters to apply to the loans. Use or when you want to locate loans that match any of the selected filters.

  7. For compound filters, use parentheses to control the order in which the filters are evaluated. Click Parentheses, select the filters to group, click the New icon, and then click OK.

  8. To adjust the Price Adjustment directly on the Price Adjustments list, click the cell in the Price Adjustment column, and type a percentage value for the adjustment when the condition is met.

    • If the investor will pay the adjustment amount when the conditions are met, enter a positive number. If the investor will receive a discount, enter a negative number.

  9. To edit a price adjustment, select an entry, click the Edit icon, make your edits, and then click Apply.

  10. To delete a price adjustment, select an entry, and then click the Delete icon.

ClosedSRP Table and SRP Details

You can apply SRPs and SRP adjustments from a template and/or create them from scratch. When you apply a template, the template data will replace the current data in the SRP Table.

ClosedApply an SRP Template

  1. Click the Template button.

  2. Select a template and click Select.

ClosedAdd New SRP Data

  1. Click the New icon in the SRP Table section.

  2. In the SRP Details section, enter a minimum and maximum Loan Amount to establish the range that the Base SRP and adjustments will apply to.

  3. Type the Base SRP value, as a percent of the loan.

  4. Type the Base SRP Adjustment, If Impounds are Waived percent for loans whose escrow has been waived. This is typically a negative value. This adjustment percent is added to the Base SRP value for loans whose escrow has been waived.

    To waive a loan's escrow, select the Escrow will be waived checkbox located on the Loans tab of the Secondary Registration tool.

  5. If additional adjustments are required for specific locations:

    • Select a location in the State column in State from the SRP Adjustment Based on Geography list.

    • Click the SRP Adjustment field to the right of the location and type the adjustment percent. This adjustment percent is added to the Base SRP value for loans on properties in the selected location.

    • Click the SRP Adjustment, If Impounds are Waved field to the right of the location and type the adjustment percent. This adjustment percent is added to the Base SRP value for loans on properties in the selected location whose escrow has been waived.

    • Select and add additional location-specific adjustments as required.

  6. When finished entering SRP values for the range, click the Save icon in the SRP Details section.

Step 4: Select Loans

  1. If you searched from the Loan Trades tab, select loans for the trade by clicking the Loans tab.

    • If you searched from the Loan Search tab, loans were selected in Step 2: Select Loans above. However, you can add more loans to the trade at this point by completing the steps below.

  2. Click the View eligible loans checkbox.

  1. In the Eligible Loans section, select one or more loans, and then click Assign Loans.

    • The loans are added to the Currently in Loan Trades list with a status of Assigned – Pending until the trade is saved.
    • If the selected loan is already assigned to another trade, you will have the opportunity to transfer that loan to this trade.

ClosedAssign a Loan to a Trade by Importing a Loan File

On the Loans tab, you can assign loans to a trade by importing a single column Excel (CSV) file.

  1. Click the Trades tab and then the Loan Trades tab.
  2. Create a new trade or select an existing one.
  3. Click the Loans tab.
  4. Select the Assign Loans from a file/manual input checkbox, at the top of the tab.
  5. Click Import.
  6. Locate the loan file you want to import, and then click Open. The file to be imported must be a single column CSV file with the loan number.
  7. Click the Save icon.
  • The loans are added to the Currently in Loan Trades list with a status of Assigned – Pending until the trade is saved.
  • If the selected loan is already assigned to another trade, an error message is displayed and that loan cannot be assigned to this trade.
  • In Encompass 24.1 and later, when a loan is assigned to a loan trade and then is assigned to an MBS pool, that loan is updated with a Trade Assignment Status of “Removed-Pending” and will be removed from the Loans tab.

ClosedAssign a Loan to a Trade by Entering a Loan Number

On the Loans tab, you can assign loans to a trade by manually entering loan numbers.

  1. Click the Trades tab and then the Loans Trades tab.

  2. Create a new trade or select an existing one.

  3. Click the Loans tab.

  4. Select the Assign Loans from a file/manual input checkbox, at the top of the tab.

  5. Click the Add Loan Number icon , and then add the loan numbers for specific loan files.

    • You can enter loan numbers separated by commas or line breaks.

    • You can copy and paste loan numbers.

  6. Click the Save icon.

    • The loans are added to the Currently in Loan Trade list with a status of Assigned – Pending until the trade is saved.

    • If the Assigned Amount for the loan or loans being added is greater than the Maximum Amount for the trade, the loan or loans cannot be allocated to the trade.

    • In Encompass 24.1 and later, when a loan is assigned to a loan trade and then is assigned to an MBS pool, that loan is updated with a Trade Assignment Status of “Removed-Pending” and will be removed from the Loans tab.

ClosedAllocating Loans for Bulk Delivery

For Encompass 17.2 and later, when the Bulk Delivery checkbox is selected and the WABP is calculated (not manually entered), and a user selects the Assign loans by file/manual input checkbox on the Trade Loans tab, the Assign Loans from a File/Manual Input pop-up screen now supports the ability to enter a loan number and total price, separated by a comma (i.e., loan number,total price).

  • Click the the Add icon to manually enter or paste one loan number and total price, separated by commas, per row.
  • Click the Import button to import a CSV file with one loan number and total price, separated by commas, per row.

For loan trades, the imported Total Price will be displayed in the Loan Trade Total Sell Price column in the Loans View.

Step 5: Save the Trade and Update Loans

  1. Click the Save icon (on the top right of the screen).

  2. When asked if you want to update the loan files, click Yes.

    • When you click Yes, the Loan Data Synchronization window displays any loan and trade fields that are not synchronized.

    • If a checkbox is selected, the loan fields will be overwritten by the value entered in the trade field.

    • If a checkbox is cleared, the loan fields will not be synchronized with the trade fields.

    • By default, non-synchronized fields are displayed for each loan in turn. Select the Apply to All Loans checkbox at the bottom of the window to apply the synchronization options to all the loans you are updating.

  3. When finished, click OK.

ClosedUpdating Multiple Trades in a Queue

The Loan Data Synchronization enables multiple trades to be processed in an update queue that runs in the background. A new icon will be available in the status bar (bottom of the screen, which will open the new Trade Update Queue pop-up window. This window will display the update progress of the selected trades for users with persona access to the Trades tab.

Items of Note:

  • You may encounter an issue on the Trade Update Queue for loan trades, MBS pools, or correspondent trades where the Update Progress hangs when you attempt a batch update from the Pipeline screen (select the Update Pending Loans button). If this happens, cancel the affected trades/pools (select the X icon) on the Trade Update Queue page and then update each trade/pool individually from the Pipeline screen.

  • You may encounter an issue on the loan trades, MBS pools, or correspondent trades Pipeline screen where the Status does not automatically refresh after a trade/pool status is changed. If this happens, refresh the screen to display the correct Status.

The following are features on the Trade Update Queue:

  • The number of jobs is displayed next to the “Job Status” header.

  • The check boxes next to each entry is used to select that entry. The check box in the header column (to the left of the Trade/Pool ID) is used to select all the entries in the grid.

  • When a job is “InProgress”, a progress bar that displays the progress as a percentage will be displayed in the Update Progress/Results column. Once the job is done, the progress bar will be replaced with the job results.

  • To the right of “Job Status”, a Delete and Refresh icon is displayed.

  • To delete an entry, select the check box next to the entry and then select the Delete icon.

  • A prompt “Are you sure you want to delete the selected rows?” is displayed.

  • Select Yes, Delete Selected Rows to delete the entry.

  • The delete action cannot be undone.

  • To delete multiple entries, use the column filters to display the entries you want to delete, select the check box in the column header, and then select the Delete icon.

  • To refresh the page, select the Refresh icon.

  • When the page is refreshed, any new entries will be displayed in chronological order, unless there are search filters that affect the way the entries are displayed.

  • When the page is refreshed, any search filters will remain. However, if there are new entries, those new entries may be hidden if they do not satisfy the filter parameters.

  • In the Trade/Pool ID, Trade Type, Requested By, and Status columns, you can hover over the column header, select the Search icon, and then enter a search parameter.

  • Your previous searches will be listed. If you select a previous search, any entries that match the selected search is displayed.

  • The Trade Type column will always display “LoanTrade”, “MBSPool”, and “CorrespondentTrade” as search parameters.

  • The Status column will always display “InProgress”, “Completed”, “CompletedWithError”, “Error”, and “Cancelled” as search parameters.

  • Once your search parameter is entered, select Enter on your keyboard and any entries that match the search is displayed.

  • In the Request Date column, you can hover the column header, select the Calendar icon, and then select a date.

  • To search a date range, select the Date Range check box and enter a starting and ending date.

  • To the right of each entry, a Kebob () icon is displayed.

  • When the Kebob icon is selected, a Delete and Info() icon is displayed.

  • When the Info icon is selected, that trade or pool will be opened to its Notes/History tab and the Trade Update Queue will close.

  • If a trade update is “InProgress”, the Kebob icon will be disabled, but a Cancel icon is displayed to the left of the Kebob icon.

  • Once the Cancel icon is selected, any remaining loans in the job queue are cancelled and no more loans will be processed (loans that have already been processed will remain processed).

  • The Status will be set to “Cancelled”.

  • The Results will display, in red, the number of loans processed, the number of loans successful, the number of errors, and the number of loans cancelled.

  • At the bottom of the page, the number of entries per page and the number of pages is displayed.

  • If applicable, you can change the number of entries per page by selecting the down arrow next to “[nn]/page” with [nn] representing the number of entries. By default, 50 entries will be displayed per page.

  • If applicable, you can jump to a specific page by selecting the down arrow next to “[n]/[nn]” with [n] representing the page number and [nn] representing the total number of pages.

ClosedAbout Saving and Updating Trades

Using the Save Icon - When you save a trade using the Save icon, you have the option of updating only the trade, or both the trade and its assigned loans. Until you update the assigned loans, the data in the trade will not be synchronized with the data in the loan files.

Update Selected Loans and Update All Loans Buttons - Use these buttons on the Loans tab to synchronize data in the trade with the assigned loans.

  • Update Selected Loans - Updates the loans highlighted in the Loans grid. You must highlight at least one loan to enable this button.
  • Update All Loans - Updates all loans in the Loans grid.

When an exclamation point displays on the button, it indicates that one or more assigned loans has a Pending status (such as Assigned - Pending). Loans with the following pending statuses will be highlighted in blue:

  • Assigned - Pending
  • Shipped - Pending
  • Purchased - Pending
  • Removed - Pending

If a loan is removed from the trade, the loan’s status will change to “Removed - Pending”. If a loan has a Removed-Pending status during the update process, it will be removed from the Currently in Trade list when the update is completed.

When you click the Update Selected Loans/Update All Loans button, the Loan Data Synchronization window displays any loan and trade fields that are not synchronized.

  • If a checkbox is selected, the loan fields will be overwritten by the value entered in the trade field.

  • If a checkbox is cleared, the loan fields will not be synchronized with the trade fields.

  • By default, non-synchronized fields are displayed for each loan in turn. Select the Apply to All Loans checkbox at the bottom of the window to apply the synchronization options to all the loans you are updating.

See Also

Work with Trades

Track the Progress of a Trade

Trade Management