Strategic Guidance in a Challenging Mortgage Market
March 2012 - FHLBank Atlanta has created a new role focused on identifying, developing, and supporting strategies that enable shareholders to successfully manage and grow their mortgage operations in support of their market growth objectives and overall strategic plan.
This area will be led by Jon Keagle, vice president and manager of mortgage funding strategies for FHLBank Atlanta, who joined the Bank earlier this year. In his new post, Jon, who previously spent 14 years at Fannie Mae, will work in tandem with the Bank’s Relationship Managers to develop an in-depth understanding of a shareholder’s mortgage operations and recommend strategies that can help them capitalize on current opportunities.
“The Federal Home Loan Bank of Atlanta’s mission has always been focused on funding mortgages,” Keagle said. “But this role puts a finer point on how our shareholders can originate mortgages and approach the market.”
FHLBank Atlanta Chief Business Officer Robert Dozier said Keagle’s role is designed to augment the Bank’s already close ties with shareholders by looking at the broader market and identifying an array of opportunities that exist.
“The plan is to take what we’re seeing and apply that to our shareholders’ needs across all sizes and geographies in our district,” he said.
The idea for adding a strategic mortgage resource came after extended internal review of FHLBank Atlanta’s current operations and product offering and discussions with the Bank’s shareholders, including the role the Bank can play in helping to sort through the worst mortgage market turmoil since the Great Depression. The mortgage industry has experienced unprecedented upheaval in the past few years, both from a regulatory and business perspective, and shareholders are trying to see where they fit into the current mortgage market.
FHLBank Atlanta’s goal is to provide flexible solutions for virtually any mortgage operation structure, whether the shareholder originates mortgages for portfolio investment, for sale in the secondary market, or a combination of both. Keagle said that the Bank’s growing selection of customizable funding products can be effectively applied to either strategy as well as provide a possible servicing portfolio hedge.
“We want to have numerous tools in the tool belt, whenever we have strategic conversations with board members, CEOs, or our shareholders’ funding managers,” Dozier said.
A key focus of the mortgage funding strategies role will be on connecting dots that already exist. For example, shareholders that currently originate and retain mortgages in portfolio may not be using Bank advances to hedge interest rate risk or match-fund those loans. According to Keagle, there will be an opportunity to develop a funding plan in this area. In the process of connecting these dots, the Bank may also identify opportunities for new variations on Bank advances, and the Bank’s expanded capabilities around product customization fit well with this potential opportunity.
Keagle said that despite the industry’s recent challenges in the wake of the housing market’s collapse, the mortgage market is beginning to rebound and there are opportunities for financial institutions large and small.
“The mortgage market is still working,” he said, noting that interest rates are at historic lows and these rates along with lower property values create good buying opportunities.
Those forces, for example, play toward some of the Bank’s set-aside products, which provide down-payment and closing-cost funding for the purchase of a home. Keagle will work with others at FHLBank Atlanta to look at the Bank’s full product portfolio and identify how each product line can support a shareholder’s mortgage operation. For example, the Bank’s set-aside products can help shareholders grow their mortgage origination businesses in the low- and moderate-income markets. Within this product portfolio are programs that allow shareholders to move distressed properties from their books, and as Keagle said, help “remove the backlog” the housing industry faces.
“We want to continue in that role as a trusted resource for our shareholders,” he said. “It’s a challenging environment, but there are a lot of opportunities as well.”
If you’re interested in learning more about how FHLBank Atlanta can be a resource in this area, please contact your Relationship Manager at 1-800-536-9650.
© 2012 Federal Home Loan Bank of Atlanta, All Rights Reserved. 1475 Peachtree Street NE, Atlanta, GA 30309
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.