DXM TECHNOLOGY
DXM technology transforms a 30-year fixed rate mortgage into customizable floating rate instruments with any legal final maturity. We create an interest rate swap with embedded prepayment options (“mortgage swap”), a pure prepayment hedge, and a two-way market for both instruments.
Best Effort Auction Platform
Minimizes Risk and Cost
DXM enables securitization auctions among mortgage originators and investors, without any sponsor execution risk. Sponsors act as riskless principal intermediaries without additional investment or balance sheet risk.
The auction process matches parties from both sides of the transaction. If no match occurs, no transactions are executed. Execution fees are paid by the participants in the auction and not the securitization sponsor.
Integrated Framework Components
Integrated Framework Components
Technology
Uses enhanced interest rate swap to uniquely split funding component, interest rate, prepayment, and credit risk from any mortgage instrument
Applications
Multiple transformative applications that address complex balance sheet and risk adjusted return problems for commercial banks, asset managers, mutual funds and mortgage originators
Legal, Accounting and Regulatory Framework
Generates strategies that are in full compliance with Dodd-Frank, ERISA, BASEL 3, CFTC, SEC and FASB hedge accounting
Technology
Uses enhanced interest rate swap to uniquely split funding component, interest rate, prepayment, and credit risk from any mortgage instrument
Applications
Multiple transformative applications that address complex balance sheet and risk adjusted return problems for commercial banks, asset managers, mutual funds and mortgage originators
Legal, Accounting and Regulatory Framework
Generates strategies that are in full compliance with Dodd-Frank, ERISA, BASEL 3, CFTC, SEC and FASB hedge accounting
TRUSTED BY INDUSTRY EXPERTS
Major DC Law Firm
Conducted extensive legal analysis and developed comprehensive framework for implementation. Execution framework fully compliant with Dodd-Frank, ERISA, CFTC, BASEL 3, SEC. etc.
Tier 1 Investment Bank Head of Capital Markets
Concluded that DXM solved a 40 year old problem to efficiently split interest rate, credit and funding risks from residential fixed rate mortgages. Specifically, DXM enables, for the first time, 30 year fixed rate MBS to be transformed into mortgage instruments with maturities at all points along the yield curve.
Big 4 Accounting Firm
Agreed that cash flows of DXM Mortgage Swaps provide a perfect offset to the cash flows of the underlying mortgage instrument. Thus, transactions uniquely qualify for hedge accounting.
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