FHLBank Advances Jump 16%

Recent turmoil in the credit markets prompted banks and thrifts to increase their borrowings from the Federal Home Loan Banks by $110 billion in August.The FHLBank System Office of Finance reported that advances jumped 16.4% in August, to $769 billion. The Atlanta FHLBank reported that it made $29.1 billion in advances in July and August. (During the first six months of the year, its advances grew by only $2.7 billion.) The FHLBank of San Francisco reported preliminary data indicating that its advances rose by a total of $53 billion over July and August. Meanwhile, members of the New York FHLBank increased their borrowings by 11%, or $6.5 billion, during August. Astoria FS&L president and chief executive George Engelke Jr. said he suspects that most of the demand for FHLBank borrowings came from banks and thrifts that engage in mortgage banking, as opposed to portfolio lenders like Astoria. He reported that Astoria has seen a "huge pick-up" in mortgage applications in the last three to four weeks. However, it will take another 30-45 days before the loans are closed -- so there is no immediate need for funding, he said.