Iowa Bankers Association Iowa Bankers Insurance & Services, Inc.
Iowa Bankers Association
8800 NW 62nd Avenue
Johnston, IA 50131
Toll-Free: 800-532-1423
Local: 515-286-4300
Fax: 515-280-4140

IBMC History

History:IBMC History

During the late 1970s, it became clear that the banking industry could no longer afford to send its good customers down the street to the savings and loans for their home mortgages if they expected to retain the balance of the retail business. Following a study and the hiring of an outside consultant for evaluation, the decision was made to form Iowa Bankers Mortgage Corporation (IBMC) with Iowa Bankers Association (IBA) investing $100,000 and obtaining all of the voting stock, and Iowa Bankers Insurance & Services, Inc., (IBIS) buying $150,000 of preferred stock. IBIS requested participation in the mortgage program because of the potential benefit of obtaining access to mortgage life and other insurance business through sales by IBMC.

A business plan was established and a staff of 14 was retained to operate the mortgage company in anticipation of the volume that had been projected. The banks that were solicited and signed up, also signed 12-year promissory notes of $10-80,000, depending upon the size of bank and the amount of involvement each individual bank might choose to have in the capital trust note program. This was a key concept in the early development of IBMC. This program called for banks to have the ability to put up existing mortgages as collateral for the advancement of funds so that they would be available for re-loaning either in the real estate market or back into the community. At that time, liquidity was a key issue among the banks and this was seen as an excellent vehicle for utilizing a great deal of underwater collateral for an additional source of funds without having to take a loss on the sale of mortgages. Many of the mortgages could not have been sold anyway because of improper documentation or certification.

Shortly after incorporation, interest rates started to increase, and by fall 1980 it became obvious that rates were not going to decrease rapidly. To keep the operation afloat, the staff was trimmed to seven. By the mid 1980s, the volume began to increase and the involvement in the Iowa Housing Finance Authority servicing arrangements also added to the company’s income and volume. As interest rates dropped in 1985 and early 1986, the volume returned to levels similar to those originally projected when the company started, and staff was gradually increased as volume continued.

The advent of IBMC’s Correspondent Program (in which IBMC purchases loan originated and closed in the individual bank’s name) as an alternative to our full-service program (where IBMC closes the loan in it’s own name) enhanced IBMC’s ability to service the membership through higher volume and diversity of structure.

An agricultural real estate loan program was established in July 1992 that allows IBMC to offer similar products for agricultural loans as those for residential loans.

The refinance boom of 1992 and 1993 substantially increased IBMC’s servicing base and solidified its presence as a competitive player in the secondary market. The original capital promissory notes from IBMC’s inception were completely paid off in 1999. IBMC has made significant strides in providing its users with competitive rates, a variety of loan products, and enhanced technology tools facilitating efficient use of its programs.

Today, IBMC is being utilized by over 240 Iowa bank locations, services approximately $1.5 Billion in mortgage loans in seven states, and is also approved as a centralized servicer for the Federal Home Loan Bank’s MPF mortgage program.
 

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Iowa Bankers Insurance & Services (IBIS) offers Iowa banks a full line of insurance products.

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The Iowa Bankers Association (IBA) is dedicated to serving Iowa banks and their employees.

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