JPMorgan Chase Invests in Maxex Mortgage Trading Platform

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JPMorgan Chase announced on Tuesday that partnership started in 2017 with Maxex, a platform used for private market transactions for the provision of whole loans, with new strategic investments.

The financial terms of these investments were not disclosed, but they are in line with the new use of the equity incentive model designed to encourage co-investment by platform users and others.

The investment reinforces signs of renewed confidence in the private market for large and relevant residential mortgages. fought at the start of the pandemic last year and has been relatively small since the Great Recession. Recent developments in economic and public policy, including: reduced purchase of a second home and investor mortgage two state-sponsored businesses have since revived it.

“The private market is incredibly resilient right now,” said Maxex Chairman and CEO Tom Pearce. “GSE are making changes and we are the source of these credits.”

For the average lender, the Mortgage Bankers Association found that vacation and investment properties accounted for roughly 14% of purchase loan applications and 8% of loan applications around the time the new GSE limits went into effect earlier this year.

This means that lenders will need to find new buyers to $ 10 to $ 20 billion on non-owner mortgages due to the new 7% restrictions on the purchase of such loans by Fannie Mae and Freddie Mac.

Maxex has sold nearly $ 20 billion in loans since its inception, according to a company press release, and has more than tripled in volume since 2019.

The loan trading platform has decided to adopt a new equity incentive model based on how well it has been used for securities traders such as TradeWeb, Intercontinental Exchange, and MarketAxess, Pierce said. According to Pearce, Maxex’s ownership interests are structured so that no user of the platform has voting rights in excess of 4.9% of the shares.

The platform has a wide range of users of different sizes. In addition to big players like JPMorgan Chase, small mortgage companies use it because their clearinghouse model offers services such as automated due diligence that eases their operational and risk management burdens associated with lending transactions.



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