SSJ_Optimal Blue_Redacted.pdf

Sole Source Justification (SSJ) Procurements exceeding the Simplified Acquisition Threshold (SAT) pursuant to FAR Subpart 13.5

Sole Source Justification for Simplified Acquisitions exceeding the SAT Pursuant to FAR Subpart 13.5

4. Identification of the authority. This action is being taken under the authority pursuant to

FAR 13.501.

5. Demonstration that the proposed contractor’s unique qualifications or the nature of the acquisition requires use of the authority cited.

The Bureau requires residential mortgage rate lock offering data with the following specifications:

a. Datasets must be made available in standard formats (e.g., csv, tab-delimited text, XML) that are natively compatible for loading into SAS Server, PostgreSQL, and MS SQL Server environments. Datasets will be made available to CFPB via common file transfer protocols (e.g., SFTP).

b. In addition, any Microsoft Office format (e.g., Word, PowerPoint, Excel) or PDF document deliverables to CFPB must be in an accessible format, per Section 508 Requirements.

c. The data shall contain loan-level data on residential mortgage rate lock captured at time of initial lock request on a mortgage product pricing engine software platform that is used in the mortgage production process, meeting the minimum coverage criteria listed in the specifications document.

d. The historical rate lock data history should start no later than 2013. Between 2013 and 2023, the total number of observations of historical records should be no fewer than the minimum coverage criteria.

e. In addition to the rate lock data should provide daily updates that are passed through the provider's product pricing engine software platform, reflecting the concurrent market trends and conditions. The overall coverage of the ongoing/concurrent rate lock data should be consistent with the coverage of the historical data.

f. Data that captures real time search of mortgage pricing scenarios across originators nationwide that is derived from the same product price engine (scenarios pricing offering).

g. All data fields contained in its data set, which must, at minimum, include the following fields:

-Time of initial lock request, captured to the second -Geography of property, with specificity at the 5 digit zip code level

-Property detail including occupancy, property type, number of units, and purchase price or appraised value

-Loan purpose -Loan amount -Loan note rate -Rate lock period

-"Buy price" attributed to the loan by the mortgage originator – before and after loan level pricing adjustments (LLPAs)

-Credit characteristics including Loan-to-Value (LTV), credit score, Debt-to- Income (DTI), and qualifying income

-Loan type, loan term, amortization type

h. Data must not include any directly identifying and/or personally-identifying information, such as residential real estate property buyer's name, address, social security numbers, etc.

i. Scenario pricing offering data must include:

-Metropolitan Statistical Areas (MSA) -Loan Type (Conforming, NonConforming, FHA, VA, USDA) -Loan Purpose (Purchase, Cashout Refi, Rate/Term Refi) -Loan Amount -Property Type -Occupancy -Credit Score -Loan-to-Value (LTV)

j. Data must come with support for users of the dataset throughout the duration of the contract. Support service must be 2 business days or less.

k. Contractor and its data subscription provider must agree to The Government's Data

Use Rights.

6. Description of efforts made to ensure that offers are solicited from as many potential sources as is practicable.

A combined synopsis/solicitation will be publicized as required by subpart 5.2 on SAM.gov.

7. Determination by the contracting officer that the anticipated cost to the Government will be fair and reasonable.

The CFPB intends to compare the prices proposed to publicly available data as well as the prices utilized by other Federal Government agencies who have also purchased this (and/or similar data) from Optimal Blue. Based on this analysis, the Contracting Officer will make a fair and reasonable determination prior to any subsequent contract award.

8. Description of market research.

Based on a review of economic literatures and internet searches there is no other vendor who provides residential mortgage rate offering data and scenario pricing offering that meets the Bureau's needs.

9. Any other facts supporting the justification.

Mortgage pricing is highly complex, with multiple interchangeable/fungible pieces with a lot of tradeoffs. Information asymmetry permeates throughout the market. Of the high concern to the Bureau, underserved and vulnerable consumers may be subject to unfair/deceptive practice and discrimination, facing such complex products and pricing mechanisms. Previously, researchers in the Federal Reserve System have been using mortgage rate lock data to study the mortgage pricing of residential mortgage loans and published impactful papers.

This requirement is to acquire data that is substantively similar to the rate lock data that the Federal Reserve System researchers used for its publications, in order to study the mortgage pricing, lender and consumer behaviors and potential discrimination in the mortgage market, and to access the scenario pricing offering to run searches and schedule reports in real-time. To effectively replicate and expand upon existing literature published by the Federal Reserve System researchers, it is critical that the Bureau uses the same rate lock data source and tool produced by Optimal Blue for data and research consistency.

Data characteristics that make Optimal Blue unique in meeting the Bureau's requirement include:

a. The Bureau requires loan-level data. Currently, no other vendor provides at the level of detail needed to track the price variables that lenders use and associate with a loan.

b. Optimal Blue's datasets are driven by a product and pricing engine that automates mortgage details and provides loan pricing scenarios across originators nationwide.

c. Data is updated and delivered daily.

10. A listing of the sources, if any that expressed, in writing, an interest in the acquisition.

N/A. The combined synopsis/solicitation will be posted on SAM.gov

11. A statement of the actions, if any, the agency may take to remove or overcome any barriers to competition before any subsequent acquisition for supplies or services required.

The Bureau will continue to monitor the marketplace for other potential data providers in the future to encourage and promote competition, if possible.

12. The CFPB intends to post the requirement pursuant to FAR 13.501(a)(1)(iii) and 6.305(a).