The Federal Housing Finance Board is trying to gauge the appropriate level at which a Federal Home Loan Bank can operate a mortgage purchase program without raising safety-and-soundness concerns."Like so many other things in life, the answer may be moderation," Finance Board Chairman Ronald Rosenfeld told a congressional panel. He stressed that the Seattle FHLBank's recent decision to drop its mortgage purchase program was made by its board of directors, not the Finance Board. However, Mr. Rosenfeld indicated that the Finance Board wants to provide guidance for the other FHLBanks regarding the appropriate size of their mortgage loan portfolios. "It is very high on our priority list," he said. The chairman also told the panel that an FHLBank would have to receive Finance Board approval to sell mortgage loans into the secondary market.

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