May 15, 2019 | Q2 2019

Collateral Quarterly

eNotes Update

WHAT WE ARE WORKING ON

MBA Technology Solutions Conference

"The Road to eNotes" recently took us to Dallas, TX, to the MBA Technology Solutions Conference where we (the FHLBank System) met with several eVault vendors and other industry experts. All of the working group leads reported on their progress and we mapped out the next leg of the journey. The goal is to have requirements established for the acceptance of eNotes as eligible collateral before year end as well as contract with an eVault vendor. We are also assessing any necessary changes to systems and pledging processes.

Let us know - where is your institution on "The Road to eNotes?"

LAUNCH SURVEY

2019 MERS^® User Conference

Vonda Renfrow, VP/Director, Member Services, will be attending MERS^® User Conference, and speaking at the eMortgage Boot Camp June 24-26th in Reston, VA. If you are attending let us know!

Employee Feature: Ryan Coppess

Analyst, Collateral Review

This quarter, we’re thrilled to feature one of the newest additions to the Collateral Field Staff, Ryan Coppess. Our members in Southwest Iowa or Western Missouri may have already met him during a recent Member Collateral Verification (MCV) review, but we wanted to give him a proper introduction.

“I’m motivated by the opportunity to be in front of members, face-to-face, to help them find the best ways to use collateral to help their balance sheet,” Ryan said.

READ MORE

Increasing Advance Capacity: A Member Success Story

Member Collateral Verification (MCV) reviews can be an excellent opportunity for members to improve their advance capacity. Sheilah Stoneback, Credit Analyst at One American Bank in Sioux Falls, South Dakota, shares how her team was able to increase their advance capacity by 50 percent due to stellar MCV results for both eligibility and meeting the Bank’s underwriting assessment following their most recent MCV.

“We have made determining the collateral capacity a priority and we incorporate the FHLB Des Moines eligibility determination into our loan process,” Sheilah said.

READ MORE: MEMBER SUCCESS STORY

Average Eligibility Factors Remain High Across Members

COLLATERAL UPDATE

FHLB Des Moines establishes an Eligibility Factor (EF) after assessing eligibility and underwriting quality of a sample loan portfolio following your most recent Member Collateral Verification (MCV) review. The EF is one of the primary ratios used to calculate your institution’s Advance Equivalent (AE), the maximum collateral amount available to members to secure extensions of credit.

Overall, our members do an outstanding job at pledging only eligible loans. Average eligibility from MCV reviews is around 90 percent (see graphic above). This high level isn’t surprising; accurately pledging eligible loans is rooted in large part by member practice. We've also highlighted some of the reasons that your eligibility factor may have been lower than the average in this article about common causes of loan ineligibility. Verify you are pledging correctly, referencing our Loan Eligibility Guidelines and Checklists. If you have more specific questions, a member of our collateral team would be happy to chat with you either via email or phone 800.544.3452, ext. 2500.

Common Causes of Loan Ineligibility

NOTES FROM THE FIELD

Each year, FHLB Des Moines assesses the causes of loan ineligibility from Member Collateral Verifications (MCVs) in the prior year. The primary causes tend to be the same matters, notably:

1. Loan Coding
2. Title Work

Together, the above two matters account for nearly 1/3rd of ineligible loans found in MCVs. Read about some things to consider in improving eligibility on these two issues.