by Meg Bratley | Mar 13, 2024

BondXN, Inc. (https://bondxn.com) reported that mortgage clients traded seven times securities by volume on its electronic platform in 2023, with an increase of nearly 20x in electronic bids. The dramatic rise in trading corresponds to rapidly growing demand for digital solutions in a sector that has traditionally depended on manually-intensive, error-prone workflow.

Originators are using electronic solutions to increase the efficiency and relevance of the specified pool sector of the $5.1 trillion US residential mortgage-backed securities market. Specified pools are packages of mortgages that can be bought or sold. They are essential to ensuring broader availability of mortgages to US consumers as they enable dealers to efficiently hedge the supply of new mortgages.

The BondXN platform addresses the challenges of legacy phone, email, and chat-based trading of these complex and less liquid securities by enabling real-time communication and transactions among multiple counterparties over a secure network. Its product suite includes end-to-end workflow management tools, trade execution capabilities, and market analytics, empowering market participants to effectively manage volumes while extracting actionable insights.

“There has been a seismic shift in the electronification of the mortgage market. The uptick in client participation on BondXN reflects a need for innovative solutions that enhance efficiency and transparency in securitized product markets,” said Jonathan Allen, CEO of BondXN.

The rise in trading corresponds to rapidly growing demand for digital solutions. In the past 12 months alone, three more of the top 20 mortgage originators have embraced the platform, in addition to other players. Dealer involvement has also increased, contributing to the significant growth in eTrading.

By utilizing BondXN’s intuitive interface, clients can easily distribute bid list requests (BWICs) to any counterparty they desire; regardless of whether the counterparty participates in the BondXN network. 

Bids on BondXN can be received in three ways: directly; digitally, through scraping technology; or entered manually in the system. Currently, over 90% of bids are processed electronically, therefore completely eliminating human error.

The company has plans to expand its intelligent workspace into the broader securitization market.