FHLB Atlanta Gets new Secondary Market Program

WASHINGTON - The Federal Housing Finance Board last week approved a new program by the FHLB Atlanta which will direct credit union and bank members to a conduit to sell their loan on the secondary market. The Global Mortgage Alliance Program will not buy the loans themselves, like the FHLBs' Mortgage Partnership Finance program.

The program will deal only with fixed-rate, 30-year mortgages. The Atlanta Bank will provide back-office and marketing services.

Geoff Bacino, one of the five members of the FHFB, said he sees the program as expanding the liquidity for small and medium-sized mortgage lenders. "Under this new mortgage program, the Atlanta Federal Home Loan Bank will receive fee income for serving as a mortgage conduit linking community financial institutions with private sector investors who intend to securitize these mortgage pools. This new program is one more mechanism to help link smaller financial institutions with the national and international capital markets," said Bacino, a former member of the NCUA Board.

"This new private sector program does not create another housing finance GSE. The loans that are purchased through this program will not be placed on the balance sheet of the Atlanta Bank. The new program simply combines existing private sector secondary market capabilities into an integrated program to better serve the mortgage needs of community financial institutions that are members of this Federal Home Loan Bank," said Bacino.

The Atlanta Bank has the most members of any of the 12 FHLBs, with almost 1,300, 135 of which are credit unions.