|
Thursday, March 8, 2018 |
||||||||
|---|---|---|---|---|---|---|---|---|
|
MANAGING DIRECTOR: |
|
US Treasury Market |
|||||||||||
| Date | 1 mo | 3 mo | 6 mo | 1 yr | 2 yr | 3 yr | 5 yr | 7 yr | 10 yr | 20 yr | 30 yr |
| 3/1/18 | 1.50 | 1.63 | 1.85 | 2.05 | 2.22 | 2.36 | 2.58 | 2.74 | 2.81 | 2.97 | 3.09 |
| 3/2/18 | 1.50 | 1.65 | 1.86 | 2.06 | 2.25 | 2.40 | 2.63 | 2.79 | 2.86 | 3.02 | 3.14 |
| 3/5/18 | 1.53 | 1.70 | 1.86 | 2.06 | 2.24 | 2.41 | 2.65 | 2.81 | 2.88 | 3.04 | 3.16 |
| 3/6/18 | 1.56 | 1.68 | 1.87 | 2.06 | 2.25 | 2.42 | 2.65 | 2.81 | 2.88 | 3.03 | 3.14 |
| 3/7/18 | 1.57 | 1.68 | 1.87 | 2.05 | 2.25 | 2.42 | 2.65 | 2.81 | 2.89 | 3.04 | 3.15 |
Source: U.S. Department of the Treasury, as of 3/7/18
Check CRA off the List for 2018
Since 1977 when the Community Reinvestment Act (CRA) was passed, banks have been required to satisfy requirements that show they are supporting their communities. The act was passed as a measure to address discrimination in the credit and housing markets in particular areas. In addition to requiring banks to meet the credit needs of their entire communities, CRA directs the regulatory agencies to assess each institutions record of doing so. The record is taken into account when institutions apply to open new branches or acquire/be acquired by another bank.
Even though on paper it sounds like an easy requirement to complete, not all banks are in markets that can provide direct loans to low to moderate income borrowers. An efficient way of completing the task is looking to CRA Targeted Mortgage Backed Securities. These are designed to provide investors with an investment option that addresses the affordable housing needs of low income individuals, while providing liquidity and potentially greater safety to the investor over a direct loan.
The process for purchasing CRA targeted mortgage backed securities is a simple one. The investor specifies the geographical area from which the low income loans which comprise the security will be sourced. Once determined, the assembler will search for qualifying loans to feed in to the pool. When loans are identified, the loan package will be submitted to one of the three agencies for securitization. Once all of the conforming loans are securitized they will be backed by the full faith and credit of the issuing agency, just like any other Agency MBS pool.
Rather than waiting until the fourth quarter to complete this, looking earlier in the year may be a good idea to ensure loans are available to secure. Give us a call to discuss.
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