Farmer Mac Announces Strategic Acquisition and Expansion of Loan Management Function
WASHINGTON, August 18, 2021 / PRNewswire / – The Federal Agricultural Mortgage Corporation (Farmer Mac; NYSE: AGM and AGM.A), the country’s aftermarket provider that is increasing the availability and accessibility of credit to benefit rural America, announced today it was strengthening its by expanding its internal loan management function. To further strengthen these capabilities, the company purchased the loan management rights for a portion of its Farm & Ranch and USDA Guaranteed loan portfolios through a strategic acquisition.
Farmer Mac has historically chosen a decentralized model for managing its loan portfolios, contracting with a network of third party institutions (“Central Servicers”) to take on most of the loan management responsibilities for its Farm & Ranch and USDA loan portfolios. Guaranteed. With the expansion of its own loan management capabilities, Farmer Mac will now serve as the central agent for all loans held by Farmer Mac which are currently managed by Conterra Ag Capital (“Conterra”), one of the principal central agents. of Farmer Mac, who continue to work closely with Farmer Mac as an originator of value loans. As part of this strategic transaction, Farmer Mac purchased all of Conterra’s service rights to the loans held by Farmer Mac, covering a significant portion of the total Farm & Ranch and USDA Guaranteed loan portfolios of Farmer Mac. Farmer Mac has also hired key staff from Conterra’s loan management team to further strengthen its loan management capabilities. In addition to the management rights acquired from Conterra, Farmer Mac will also service certain new direct lender loans from the Farmer Mac vendor network alongside the remaining central services network, which will continue to operate under the current central management model. The company anticipates that its new role as a central service agent will result in greater efficiency that should ultimately support its mission to help lower the cost of capital for rural America while delivering key benefits to its customers.
“Expanding our internal loan management capabilities represents an incredible opportunity for Farmer Mac and will bring a myriad of benefits to our core customers, rural America’s lending institutions,” said Brad Nordholm, President and CEO of Farmer Mac. “We will take this opportunity to create greater efficiency on our loan management platforms and leverage this opportunity for more direct oversight and governance of a large portion of our portfolio, providing us with increased security, better control and faster access to data, and better We are also excited about the growth opportunities this strategic investment will provide, as it will equip us with the talent and infrastructure to more efficiently and effectively process larger and larger commercial loans. complex, a key driver in our long-term growth strategy. ”
Nordholm continued: “This decision is an important example of our dual strategy to expand business opportunities while deepening relationships with our existing core customers. our network of lenders in support of our mission to increase access to competitive credit for the benefit of our country’s farmers, ranchers and rural residents. ”
“We are pleased to welcome some of Conterra’s talented loan services group to the Farmer Mac team,” Nordholm concluded. “For the past seven years, they have been part of a team that has built an exceptional reputation with our clients. Their expertise will allow us to continuously deliver the same quality service our customers deserve and expect every time they interact with us or through any of our central third-party service providers. With their help, we will continue to work alongside our central service provider partners to deliver an enhanced experience for all of our customers. ”
About Farmer Mac
Farmer Mac is a vital part of farm credit markets and was created to increase access to and reduce the cost of credit for the benefit of American farming and rural communities. As the country’s secondary market for agricultural credit, we provide financial solutions to a wide range of the farming community, including agricultural lenders, agribusiness companies and other institutions who can benefit from access to tools. low-cost, flexible financing and risk management. Farmer Mac customers benefit from our low financing costs, low overhead, and high operational efficiency. More information about Farmer Mac is available on the Farmer Mac website at www.farmermac.com.
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SOURCE Farmer Mac