In the context of secondary registration tools in Encompass, “buy side” and “sell side” pricing refer to different approaches for determining the pricing of loans or mortgage-backed securities (MBS) in the secondary market.
- Buy Side Pricing: Buy-side pricing refers to the pricing approach used by buyers of loans or MBS in the secondary market. In Encompass, buy-side pricing allows lenders or investors to set their pricing margins or adjustments when purchasing loans or MBS from the secondary market. This allows them to customize their pricing based on their business strategies, risk tolerance, and market conditions. Buy-side pricing typically involves adding a margin to the base price or markup provided by the seller or the secondary market provider.
- Sell-Side Pricing: Sell-side pricing, on the other hand, refers to the pricing approach used by sellers of loans or MBS in the secondary market. In Encompass, sell-side pricing involves setting the initial pricing for loans or MBS that are being offered for sale in the secondary market. This pricing may be based on various factors such as the current market conditions, the creditworthiness of the loans or MBS, and the desired profit margins of the seller. Sell-side pricing is typically used by lenders or investors who want to sell their loans or MBS to other market participants.
To use buy side and sell side pricing in Encompass’s secondary registration tool, you would typically follow these steps:
- Access the secondary registration tool in Encompass, which may be a feature or module within the Encompass loan origination system (LOS).
- Choose whether you want to use buy-side pricing or sell-side pricing. If you choose buy-side pricing, you will set your pricing margins or adjustments based on your business strategies and risk tolerance. If you choose to sell-side pricing, you will set the initial pricing for the loans or MBS you offer for sale.
- Enter the relevant loan or MBS information, such as loan amount, interest rate, term, and other relevant details, depending on the requirements of the secondary registration tool in Encompass.
- Apply the pricing margins or adjustments for buy-side pricing or set the initial pricing for sell-side pricing, based on your chosen approach.
- Review and confirm the pricing details, and submit the loan or MBS for registration or sale in the secondary market through Encompass.
It’s important to note that the specific steps and features of the secondary registration tool in Encompass may vary depending on the version of Encompass you are using and the configuration set up by your organization. It’s recommended to consult Encompass documentation or seek assistance from your Encompass administrator for detailed instructions on how to use the secondary registration tool with buy side and sell side pricing. It’s also important to comply with all applicable laws, regulations, and guidelines related to secondary market transactions, pricing, and disclosures. Always consult with legal and financial professionals to ensure compliance and accuracy in your secondary market transactions. And, as with any financial decision, it’s important to carefully consider your business strategies, risk tolerance, and market conditions when using buy side and sell side pricing in Encompass or any other secondary market tools. Proper understanding and usage of buy-side and sell-side pricing can help you make informed decisions and manage your loans or MBS effectively in the secondary market. A thorough understanding of Encompass and its secondary registration tool, as well as adherence to industry best practices and regulatory requirements, is essential for the successful implementation and usage of these features. Be sure to thoroughly review and understand the documentation and training materials provided by Encompass, and seek assistance from qualified professionals as needed. Proper usage of buy-side and sell-side pricing in Encompass can help streamline your secondary market operations and support your overall business goals.
