The Federal Home Loan Bank of Chicago experienced a drop-off in loan volume from its mortgage conduit program in the third quarter.
The Mortgage Partnership Finance conduit delivered $912 million in single-family loans to Fannie Mae in the third quarter, down from $1.4 billion in the second quarter.
This drop-off may be attributed to rising rates. It also could be due to the originating banks and credit unions’ decision to hold the higher-yielding mortgages in portfolio.
During the first half of this year, FHLB members sold $3.1 billion in loans to Fannie via the MPF Xtra program.
Meanwhile, the MPF Xtra program will get a boost early next year when the
The San Francisco bank says it will “facilitate the purchase of member-originated fixed-rate mortgages for concurrent sale to Fannie Mae under the MPF Xtra product.”
The standard MPF product requires the originating lender to retain a portion of the credit and these MPF loans are generally purchased by the member’s FHLB and held in portfolio.
There are currently $28 billion in outstanding standard MPF loans and the serious delinquency rate is 1.8%.
Of the $202.5 billion in conventional loans originated via the FHLBs’ risk-sharing programs, only $304 million of losses have been realized as of June 30. “This represents a loss ratio of only 15 basis points, according to Des Moines FHLB president Richard Swanson.
