| Thursday, July 20, 2017 | ||||||||
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MANAGING DIRECTOR: |
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US Treasury Market |
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| Date | 1 mo | 3 mo | 6 mo | 1 yr | 2 yr | 3 yr | 5 yr | 7 yr | 10 yr | 20 yr | 30 yr |
| 7/13/17 | .95 | 1.05 | 1.14 | 1.23 | 1.37 | 1.55 | 1.89 | 2.16 | 2.35 | 2.69 | 2.92 |
| 7/14/17 | .93 | 1.04 | 1.12 | 1.22 | 1.35 | 1.54 | 1.87 | 2.13 | 2.33 | 2.67 | 2.91 |
| 7/17/17 | .95 | 1.07 | 1.10 | 1.22 | 1.36 | 1.53 | 1.86 | 2.12 | 2.31 | 2.65 | 2.89 |
| 7/18/17 | .95 | 1.07 | 1.11 | 1.19 | 1.36 | 1.52 | 1.82 | 2.08 | 2.27 | 2.61 | 2.85 |
| 7/19/17 | .99 | 1.11 | 1.12 | 1.23 | 1.37 | 1.52 | 1.83 | 2.09 | 2.27 | 2.61 | 2.85 |
Source: U.S. Department of the Treasury, as of 7/19/17
CRA Targeted Mortgage Backed Securities
The Community Reinvestment Act is intended to encourage depository institutions to help meet the credit needs of the communities and borrowers in which they operate. CRA eligibility is defined by borrowers or tracts with incomes that are 80% or less of the median income for a particular MSA (Metropolitan Statistical Area). The CRA was enacted by Congress in 1977.
The CRA requires that each depository institution’s record in helping meet the credit needs of its entire community be periodically evaluated by the appropriate Federal financial supervisory agency. One way to accomplish this is with the purchase of CRA targeted mortgage-backed securities. These securities consist of low-to-moderate income borrowers or low to moderate income tracts within the counties in your CRA area. These loans are typically 30 year amortizing loans, however, 15 year mortgages are sometimes available, obviously with a shorter average life and duration.
Once it is determined by your CRA regulator what qualifies as CRA credit for your institution, loans meeting those specifications will be accumulated on your behalf and securitized. Country Club Bank will have the loans securitized in a pool issued by Fannie Mae, Freddie Mac, or Ginnie Mae. These pools carry the full faith and credit of the issuing agency. The Ginnie Mae pools are zero risk base, while the Fannie and Freddie are 20% risk weighted.
Summer months are a great time to look for CRA pools. Consumers tend to move throughout the spring and summer, prior to the beginning of the new school year, so don’t wait until fall as the supply is typically more limited.
CRA targeted mortgage backed pools can help satisfy regulatory requirements of the Community Reinvestment Act, as well as provide traditional cash flow and yield.
This information is intended for institutional investors only. The material provided in this document/presentation is for informational purposes only and is intended solely for private use. Past performance is not indicative of future results. This material is not intended as an offer or solicitation for the purchase or sale of any financial instruments.
•Not FDIC Insured •No Bank Guarantee •May Lose Value