Revolutionizing the secondary mortgage market
A decades-old problem
MAXEX challenges what everyone has long accepted about the mortgage industry: that liquidity flows through a network of one-to-one relationships. That’s the way originators, banks and investors have operated for decades. This system forces companies to produce dozens of private contracts, pay tens of thousands of dollars in annual legal costs and go through multiple annual certifications. It’s archaic, inefficient and risky.
Born from crisis
Never was this system more exposed and exploited than the 2008 housing crash. Subprime loans, paired with the unchecked rise of private label mortgage-backed securities, spawned disastrous results. When home prices plummeted, foreclosures were rampant and massive Wall Street firms shuttered.
“We wanted to look at the root causes,” says MAXEX Co-Founder, Chairman and CEO Tom Pearce. “What were the real problems that caused the crash and was there a way to mitigate what happened?”
The solution: MAXEX
Launched in 2016, MAXEX’s digital exchange solves these challenges by providing a central clearinghouse for lenders, banks and investors to buy and sell loans using a standardized trading process. This makes the mortgage process more efficient, more transparent and less risky. And with the lessons learned from the financial crisis, the U.S. mortgage industry is welcoming the change. “It would have been really hard, pre-financial crisis, to get this done because everyone was making so much money with their own little private channels,” says Pearce. “It took a tsunami to hit for people to start realizing they didn’t want to be on the hook for that again.”