May 2014 - FHLBank Atlanta offers a number of products and services to support the mortgage operations of its shareholder financial institutions. The Bank recently launched Residential Available for Sale (RAFS) as a way for shareholders to increase their borrowing capacity to support secondary mortgage market activity or any other short- and long-term funding needs.
RAFS enables shareholders to establish lendable collateral value on their pipeline of closed residential 1-4 family mortgages awaiting sale into the secondary market. It is an ideal source of mortgage warehouse funding during periods of higher residential loan demand. Because RAFS is added to an institution’s overall borrowing capacity, shareholders can use the additional collateral value to secure any advance product the Bank offers and receive standard pricing. Additionally, reporting requirements are streamlined and the Bank does not require participating shareholders to deliver mortgage documents to access funding.
“RAFS is an easy-to-use way for shareholders to expand their borrowing capacity with the Bank,” said Jon Keagle, vice president and sales manager for community financial institutions at FHLBank Atlanta. “Because the additional collateral value can be used to secure any of the Bank’s advance products at market rates, RAFS is generally a far less expensive alternative to other warehouse lines available today.”
What Loans Qualify for RAFS?
Qualifying RAFS collateral includes wholly owned residential, traditional, prime 1-4 family first mortgages that are underwritten to the guidelines of the investor and identified as “held for sale” on the shareholder’s periodic regulatory reports. Mortgage loans can be pledged to the Bank for up to 90 days. In addition, all other FHLBank Atlanta collateral eligibility requirements for residential 1-4 family first mortgages apply.
How RAFS Works
To get started with RAFS, a shareholder must submit a RAFS questionnaire and an initial loan listing of proposed RAFS collateral to the Bank. The Bank will conduct a Collateral Verification Review of the proposed RAFS collateral. Shareholders also must have an FHLBank Atlanta credit score of one to nine to qualify for RAFS.
Once approved for RAFS, the shareholder must upload daily loan listings through FHLBAccess® each business day to receive lendable collateral value.
“As a trusted advisor, FHLBank Atlanta continuously seeks new opportunities to support our shareholders’ businesses,” said Keagle. “RAFS is another way the Bank can help shareholders derive more value from their secondary marketing operations.”
For additional information on RAFS requirements, please call your relationship manager or the Funding Desk at 1.800.536.9650, extension 8011.
The Federal Home Loan Bank of Atlanta is not a registered investment advisor. Nothing herein is an offer to sell or a solicitation of an offer to buy any securities or derivative products. You should consult your own legal, financial, and accounting advisors before entering into any transaction.