Magazine article American Banker

Wall Street Watch: A Third Home Loan Bank - Atlanta's - to Fund Loans

Magazine article American Banker

Wall Street Watch: A Third Home Loan Bank - Atlanta's - to Fund Loans

Article excerpt

The Federal Home Loan banks' challenge to Fannie Mae and Freddie Mac moved forward last week with the Federal Home Loan Bank of Atlanta joining the banks' alternative secondary market program.

The Atlanta bank joined the Chicago and Dallas Home Loan banks in a Mortgage Partnership Finance Program under which it will offer to assume the funding and take on the prepayment and interest rate risk of home loans.

The program, created by the Chicago Home Loan bank, is "a very welltested, turnkey operation," said Carol A. Jackson, acting president of the Atlanta bank.

"In a low-rate environment, this is the other side of a full set of programs for a Federal Home Loan bank," she said.

Nearly half her bank's members-which are in Georgia, Alabama, Maryland, the District of Columbia, Virginia, North and South Carolina, and Floridahave less than $100 million of assets.

Alex J. Pollock, president and CEO of the Chicago bank, said the New York and Pittsburgh banks are close to joining the program too. Since its inception in 1997, the banks have bought more than $1 billion in loans made by member institutions.

This alternative secondary market has grown amid lender concerns about the expanding influence of Fannie Mae and Freddie Mac.

The Home Loan banks are also fighting the government-sponsored enterprises with some political muscle of their own. The New York bank, for example, recently appointed former New Jersey Gov. James J. Florio as chairman.

Mr. …

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