(Bloomberg) -- Mizuho Americas has launched a mortgage finance business and is tapping a Barclays Plc managing director to lead it just as the US housing market starts to contract.

Mortgage securitization banker Joseph O’Doherty has recently moved to the Japanese bank, where he’ll work as a managing director and head of residential mortgage finance, according to a statement seen by Bloomberg. The veteran will arrange the bank’s new mortgage finance practice, which will help originate and distribute agency- and non-agency mortgage-backed securities, the statement said.

“Securitized Products is a core pillar of our overall markets business in the Americas, where we continue to expand the perimeter of our offering and the depth of talent on our team,” said Thomas Hartnett, head of the fixed income division, in the statement.

Doherty will be based in New York and work closely with the firm’s MBS trading and sales teams and will report to Hartnett. He joins Mizuho after nearly two decades with Barclays, where he was recently a managing director leading the mortgage financing and securitization business. 

The launch of the new business comes as mortgage bonds experience a shock. With the Federal Reserve stepping back from the agency-MBS market, there’s not enough demand to buy up the existing securities, leading to a quick softening of the market. The outlook for non-agency mortgages is equally harsh, as borrowing costs have spiked compared to a year ago, according to data compiled by Bloomberg News.

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