Legislative efforts to get the Federal Home Loan Banks involved in mortgage securitization has the potential to "destroy" the Federal Home Loan Bank System, according to the president of the New York FHLBank."Securitization would involve opening up the charters of the government-sponsored enterprises -- a wrong path at the wrong time," New York FHLBank president Alfred DelliBovi told the New Jersey Bankers Association. The Mortgage Bankers Association and the National Association of Home Builders are pushing an amendment that would allow the FHLBanks to guarantee and issue mortgage-backed securities, and they want to attach it to a GSE regulatory reform bill. Mr. DelliBovi also announced that the New York FHLBank is limiting its purchases of mortgage loans under the Mortgage Partnership Finance program. Effective immediately, the bank has limited deliveries of MPF loans from each member bank and thrift to $100 million annually. The FHLBank said few of its members originate more than $100 million in MPF loans a year, and that it will honor existing commitments for larger deliveries until they expire.
