FHLB Looking for More MPF Investors

The Federal Home Loan Bank of Chicago is lining up new investors for its Mortgage Partnership Finance conduit program.

The Chicago FHLB currently aggregates and sells conventional loans to Fannie Mae through its MPF Xtra program.

But the federally chartered wholesale bank wants to open new outlets so FHLB member banks and thrifts will be able to sell a wide array of loans to other investors.

“We are looking to expand our investor universe,” said Melissa Warren, a MPF spokesperson with the Chicago FHLB. “We are far along in conversations with additional investors,” she told NMN.

The 12 FHLBs are not allowed to securitize mortgages and holding mortgages in portfolio is capital intensive.

So the Chicago FHLB created the MPF Xtra program in 2008 so its members could get a better deal in selling their loans to Fannie Mae.

Recently the Seattle FHLB joined the MPF Xtra program. Now seven of the 12 FHLBs participate in the Xtra program, which is administrated by the Chicago bank.

During the first half of this year, FHLB members sold $3.1 billion in loans to Fannie via the MPF Xtra program, up 25% from the same period in 2012.