Hedge Model Review:
The Hedge Model Review procedure reviews the model reports to determine if the results are reasonable given market conditions and consistent with typical mortgage banking hedge strategy. This method provides a general observation of the hedge model results.
In the Hedge Model Validation method, month-end pipeline and warehouse data are obtained and run through an independent, previously verified hedge model to calculate a new hedge position assessment. The independent results are then compared with the existing hedge position to determine validation.
This Validation complies with the requirement of the OCC 2011-12, FRB SR 11-7, Model Risk Management bulletin (previously Bulletin OCC 2000-16 Risk Model Validation).
Best Efforts to Hedging Launch
Hedge Pull-Thru Confirmation
Hedge Advisor Selection
Pricing Strategy & Lock Desk Implementation
- CEOs are frustrated not knowing if their trades are executed well
- Secondary managers are frustrated by CEOs questioning their trades
- MBS can bridge the communication gap
Secondary Marketing Services include:
Pre-Hedge Assessment Evaluates:
- Secondary Policy and Procedures
- LOS Data Reliability & Status Code Structure
- Hedging Authorization & Pull-Thru Calculation Base
- Dealer Margin-Call Triggers & Call Report Line Designation
- Accounting & Technology Structure
- Data Accuracy & Staff Preparedness for Hedging
- Understanding Position Recommendation
~ MTM Reporting
~ IRLC Derivative
~ Shock Analysis
Hedge Model Validation Includes:
- Independent Assessment of the logical soundness of the Model
- Comparison of Model to "benchmark" models
- Validation of Model Predictions to "real-world" events
See MBS webpage FDIC / OCC
Pricing Strategy – MBS can help you design a pricing strategy to maximize profit and remain competitive.
Best Efforts to Hedging – MBS can help you make the transition from Best Efforts to mandatory forward commitments and TBA Open Short.
Secondary Marketing Policies and Procedures – MBS can create custom procedures tailored to your way of doing business.
Staffing and Training Assistance – MBS can help you hire and train the necessary staff if you want to handle your secondary marketing efforts internally.
Systems Automation and Technology – MBS can help you automate your secondary marketing functions and recommend the necessary technology pieces to help in that effort.