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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.

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