Allows the borrower to originate and hold fixed-rate mortgages without undertaking significant interest rate and prepayment risk
Useful in lengthening liabilities to facilitate risk management
Effective financing tool for both mortgage pass-throughs and collateralized mortgage obligations (CMOs)
Fixed for entire term to maturity
Actual / Actual day basis
Monthly (or call date if call option is exercised)
At maturity or call date (if call option is exercised)
With 20 business days' notice, prepayable with no prepayment fee; prepayable on other dates, subject to prepayment fee
A Callable Advance application is required for each borrowing
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