|
|
|
|
 |
|
Expanded Municipal Bond Program Guidelines
We recently updated our municipal bond program requirements to provide you with increased pledging options and flexibility:
- The acceptable municipal bond rating has been lowered from AA to A by one or more NRSRO
- Mortgage revenue bonds (Housing Authority bonds) and Refunding bonds can now be pledged
- The total collateral type categories have been reduced from 8 to 2 (6410: Tax-Exempt and 6420: Taxable)
- Taxable bonds can now be pledged, accompanied by new LTVs:
- Current tax exempt LTV: 91%
- Current taxable LTV: 89%
Be aware that all other standing eligibility requirements are still in place:
- Issue must have real estate nexus
- Must be fixed rate
- Must be rated
- Must have an ascertainable price
- Must be issued directly by state, municipality or school district
- Revenue bonds must be for essential services
Please contact us if you have any questions surrounding these changes, or if you'd like additional information.
Thank you for Completing your eNotes Survey
On April 17th, your institution received a link to a survey regarding usage of eNotes and your readiness to pledge and deliver them. We appreciate you taking the time to provide the FHLBank system with your open, honest feedback.
We will continue overall system conversations about the feasibility of standards for accepting eNotes as collateral, with an initial focus on residential mortgages. Standards on the table include eVaults and vendors. FHLB Des Moines is actively working with the other FHLBanks in preparing to move forward, assigning collateral haircuts and accepting residential eNotes as collateral once an active secondary market for this emerges.
|
 |
|
Please Identify a Backup eAdvantage Administrator ASAP
Our eAdvantage portal is designed to serve as your all-encompassing membership account transaction hub. Due to the utmost importance that eAdvantage plays in your membership with us, we strongly encourage you to identify an additional eAdvantage administrator within your institution. This helps ensure all necessary deadlines are met, and your institution is doubly protected against any bumps in the road.
An Analysis on Collateral Eligibility
In the Quarter One edition of Collateral Quarterly, we shared the primary matters causing loan ineligibility for 2015 as found in our member Collateral Reviews (MCVs). Below is a summary of the top ineligibility issues for 2016 along with 2015 data. Besides impacting advance capacity, keep in mind that we use your last MCV results to set a sample size at the next MCV, therefore the better the results, the lower the next MCV sample.
|
Loan Ineligibility Issues from MCV Loan Reviews
|
2016
No. of Exceptions
|
2016 %
|
2015 MCVs Rank
|
2015 %
|
|
Loan Not Primarily Secured by Subject Portfolio Collateral
- Often, the loan is improperly coded on a member's loan accounting system
|
544
|
15.03%
|
1st
|
12.14%
|
|
Not First Mortgage Lien/Property(s) subject to prior mortgage
- Frequently, prior lien satisfactions are not in evidenced
|
327
|
9.03%
|
2nd
|
6.07%
|
|
Qualifying LTV exceeds Portfolio Limitation
- Loans needs to be properly secured with lien position verified and meet collateral property requirements to be given eligible value
|
289
|
7.98%
|
3rd
|
5.75%
|
|
Lien Verification Not in File
|
204
|
5.64%
|
6th
|
4.78%
|
|
Collateral Property Type not Pledgeable
|
168
|
4.64%
|
7th
|
4.18%
|
|
Collateral Property Valuation Not in File
|
163
|
4.50%
|
10th
|
2.44%
|
|
Note lacks required Amortizing Payment structure
- Where required for certain type codes
|
155
|
4.28%
|
8th
|
3.91%
|
|
Lien Verification not Post Recording
|
123
|
3.40%
|
4th
|
5.10%
|
|
Loan is Revolving Line of Credit (pledged as term loan)
|
118
|
3.26%
|
11th
|
2.39%
|
|
Loan not Fully Disbursed (required for term loans)
|
113
|
3.12%
|
13th
|
2.11%
|
|
Original Note or Original Modifications Not Provided
|
94
|
2.60%
|
5th
|
4.83%
|
|
Collateral Property Manufactured Home not deemed Real Property by applicable law
|
86
|
2.38%
|
12th
|
2.34%
|
|
Participation Loan pledged in Non-Participation portfolio
|
70
|
1.93%
|
9th
|
3.49%
|
|
Loan guaranteed by U.S. Gov’t or Agency
- Agency Guaranteed loans need to be reported in the correct type code.
|
61
|
1.69%
|
16th
|
1.47%
|
|
Loan to Borrower with Subprime Characteristics not eligible for Portfolio
|
57
|
1.57%
|
14th
|
1.79%
|
|
Flood Zone Compliance: No Flood Insurance where required or No Determination
|
56
|
1.55%
|
15th
|
1.75%
|
|
Unpaid Principal Balance/Credit Limit greater than Secured Debt Amount
|
50
|
1.38%
|
17th
|
.87%
|
|
Property subject to Prior Nonmortgage Lien
|
42
|
1.16%
|
18th
|
.83%
|
|
 |
|
Enhanced MCV Process
As we mentioned in the Quarter One newsletter, we are working to enhance the MCV scheduling process. Part of this enhancement now includes an update to the MCV frequency for all of our members. Going forward, every member will have an MCV performed on pledged loan collateral every five (5) years. Members with increased risk factors may deem a more frequent MCV process but will be determined on an individual member basis.
This scheduling update is aimed to also help you manage risk and identify any potential issues before a regulatory finding occurs. We understand you may have questions or concerns about this, and we are here to help walk you through these changes.
Please reach out to us if you have any questions or want to learn more.
|
 |
Certification of the BBC forms is the final step in submission. Make sure to click “certify” to ensure your BBCs are submitted on time. |
|
 |
Is there someone else on your team that should receive this newsletter? They can opt in here. |
|
|
|
|
|
|
