Our Mortgage Purchase Program helps take risk off your balance sheet
We purchase qualifying residential mortgage loans from our members through the Mortgage Purchase Program (MPP). By selling mortgage loans to us, members can increase their balance sheet liquidity and minimize the risks associated with holding fixed rate mortgages in portfolio.
We purchase both conforming conventional 1-4 family residential loans and loans insured by the Federal Housing Administration (FHA). All loans must be fixed-rate, fully amortizing, and comply with our credit underwriting guidelines.
All mortgage loans purchased from members through the MPP are held on the FHLB’s balance sheet. We do not securitize MPP loans for sale to other investors. We mitigate our credit risk exposure through our underwriting and pool composition requirements and through the establishment of the Lender Risk Account credit enhancement. The LRA protects the FHLB against possible credit losses by setting aside a portion of the initial purchase price into a performance based escrow account that can be used to offset possible loan losses. LRA balances not used to offset losses are returned to the member in accordance with a predetermined schedule.
To learn more about our Mortgage Purchase Program, contact Joe Castlen at 866-677-3452.