Through the Lender Risk Account (LRA). The LRA is a loan loss reserve account funded through the proceeds of individual mortgages sold to the FHLBank. The amount deposited into the LRA is approximately 30-50 basis points of the original loan balance. One LRA is established for each Master Commitment.

If a loss on an individual loan is in excess of homeowner equity and (if applicable) primary mortgage insurance, funds are withdrawn from the LRA to cover the shortfall. The member is eligible to receive LRA payments net of losses, beginning in the sixth year and ending in the eleventh year. The member can monitor the status of the LRA, including the loan loss history and payment schedule.

Very few. The MPP is intentionally designed to support many standard operating procedures of a mortgage loan department, including the observation of Agency guidelines and delegated underwriting.

To get started, please call the MPP Department at (513) 852-7555 or your Marketing Representative. We'll review the forms and agreements that your institution needs to complete. We'll also provide you with a manual that details the various procedures and requirements of the program. Before you start selling loans to the FHLBank, we strongly recommend that you meet with us in person to make sure that your staff is fully informed and familiar with all aspects of the MPP.

Members may be their own document custodian subject to satisfying eligibility criteria.

Members have up to nine months to deliver a minimum commitment of $2.0 million.

Rate sheets with indicative pricing will be made available through the secure password protected Loan Acquisition System (LAS) module of the FHLBank's Web site. Prices are adjusted throughout the day based on market conditions.

The member's internal quality control procedures will be reviewed prior to participation. A third party agent will periodically conduct a random sampling of a member's loans to ensure program compliance.

Members have the option to retain the servicing or sell the servicing rights to a third party servicer approved by the FHLBank.

All financial transactions, including purchase proceeds, interest, principal, and LRA payments, flow through the member's demand account at the FHLBank.

Members commit to the trade and transmit loan data via the Internet. Each trade constitutes a Mandatory Delivery Contract with specific loan pool characteristics.

Loans may be approved by most conventional underwriting programs, with underwriting status delegated to members in accordance with guidelines of the supplemental insurance provider.