“We are excited to make a strategic investment in MAXEX as it enables the standardization of an otherwise fragmented sector of the residential mortgage market,” said Simpson, managing director and head of Non-Agency Whole Loan and RMBS Trading at JP Morgan. “We look forward to further growth at MAXEX as they build a more liquid marketplace for trading mortgage loans.”
Continue reading: MAXEX and JP Morgan are teaming up to create a “level playing field” for minority-owned lenders
In addition to the investment, Pearce said they created a stock incentive model that aims to encourage co-investments in MAXEX by other buyers on the platform and motivate them to trade on the exchange to create more liquidity for sellers .
“This consortium model is in line with the way other leading fixed income marketplaces have achieved wide market adoption,” he said
Existing investors such as AGNC Ventures and Moore Asset Backed Fund also participated in the investment. The terms of the investment were not disclosed.