San Diego-based Solera Group has selected TAPMaster, the enterprise data management platform from TAP Solutions, to support the analytic and risk management demands of its mortgage loan production and mortgage-backed securities (MBS) advisory services business. Solera’s CEO Chris Wiley says the repurposing and extension of TAPMaster to enable it to cope with “the next level of granularity down – the loans behind the fixed income securities” creates a unique solution. “There is no other product out there which has this concept: I looked around for one for a year.”
TAPMaster will serve as Solera’s core data hub, managing data from a variety of sources including Reuters, loan originators and associated market participants including Fannie Mae, Freddie Mac, Ginnie Mae and FHA/VA. TAP worked with Solera’s staff in San Diego, Seattle and Houston to install the base TAPMaster platform in October, and full integration is being completed this month.
The nature of the mortgage business in the US is that the vast majority of loan production comes from the mortgage brokers – those individuals closest to the customer, Wiley says. “This means much of the loan production activity is not visible until it gets to the larger organisations where it is aggregated. My business is to counsel the mid-tier mortgage bankers who enable them to do their business most effectively, which means I have visibility on the lowest level of collateral production.” Wiley had a requirement for an enterprise-class solution to deal with fixed income securities collateral data. “I was referred to TAP by an associate at Microsoft, Bill Hartnett of Capital Markets, and by coincidence a close friend of mine became product manager at TAP.”
Upon comparing notes, it became apparent to Wiley that the TAP solution already had “mastery of fixed income securities data”. “Mortgage loans are collateral for fixed income securities. So by opting to work with TAP I was avoiding having to teach a data warehouse vendor to understand and manage fixed income securities data,” he says. “I needed to track tens of thousands of loans in production across hundreds of customers, to create a consolidated view for my business, and for my trading partners. That is what TAP does for market securities data.” The process of extending TAPMaster to cope with the loans behind the fixed income securities has been straightforward, he says: TAP’s architects simply created a new class of securities for Solera’s loan collateral data. “I brought in TAP for my infrastructure so I wouldn’t have to think about what happens when I store data and want to get it back. TAPMaster is able to handle time series data, where instruments evolve over time as valuations change, and have to be correlated to market prices in real-time.”
TAP’s Microsoft affiliation is significant in its choice by Solera. “We are very close to the people at Microsoft. Microsoft Financing enabled us to accelerate deployment of our infrastructure, which consists of TAP in concert with Microsoft-based analytical and portal compon-ents,” Wiley says. As well as deploying TAP’s existing capabilities to handle feeds from vendors such as Reuters, Solera intends to use Microsoft BizTalk to handle integration of data from its clients. “My clients produce reports which are nothing but spreadsheets. I have to take each client’s data and cleanse and reformat it so it is suitable for storage. This is classic BizTalk territory. We are partnering with a Microsoft Gold partner Neudesic for that capability.” Solera is also using the Microsoft SharePoint platform to receive the data from the customers, and to push reporting back to them. “We analyse their production data for its appropriateness for the market, and use SharePoint as a mailbox to receive that data and send back the value-added analytics to our customers and trading partners,” Wiley says.
Solera’s goal is to be “the screen for mortgage production collateral”, Wiley says, enabling “the small bankers I deal with, who produce 100 to 500 units a month of mortgage contracts, to have the benefit of interacting with Wall Street firms. It was never efficient for the Wall Street firms to deal with the small guys before. The transpar-ency we provide gives them better pricing of products, while we act as a value-added data services provider.”
Wiley believes the way in which Solera’s use of TAPMaster has extended its capabilities should create opportunities for TAP to sell the data management system to his trading partners, including Wall Street firms. “What I have suggested to TAP from the beginning is that if we could take the system down one level of granu-larity to the collateral, I’d wager that a significant proportion of my trading partners will want to adopt the system on their side. I’ll be happy to make introductions to these Wall Street firms, because it will make it easier for them to do business with me,” Wiley concludes.