Capital Assets Weekly Comments

Rachael Leamon
Don’t Just Wait — Prepare

Challenges for depositories have been building for months and new ones are likely on the horizon. If there is one thing this year has taught us it’s to expect the unexpected. Added to the list of challenges is the temporary suspension of seasoned bulk sales to Fannie Mae and Freddie Mac that is about to enter its third month! The pause in bulk sales shut the door on one of the most important balance sheet management tools depositories rely on, which is the ability to sell prime-credit, seasoned mortgage loans as part of a structured balance sheet strategy. We at FHN Financial Capital Assets Corp. (Capital Assets) believe we are closer to the end of this suspension than the beginning, and as soon as the massive pipeline of flow loans begins to wane and facts emerge about the lower risk of seasoned portfolio loans, such as the type our customers make, the seasoned bulk path will reopen. Just “waiting” for the window to open could mean you face a mad dash to get in line if you postpone all the prep work until the greenlight turns on. Now is not the time to wait for something to happen. Now is the time to prepare for it.

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