FHLBank Mortgage Purchases Under Review

The Federal Housing Finance Board and its supervisory staff are reviewing and analyzing the risks the Federal Home Loan Banks take in purchasing mortgages from their members and holding them in portfolio."Given our purpose of regulating for safety and soundness, it is implicit that you consider risk," Finance Board Chairman Ronald Rosenfeld said in an interview with MortgageWire. "If we find that these assets create an overwhelming problem, then we have to do something about it. On the other hand, they may be very attractive." The former Ginnie Mae president, who became the new Finance Board chairman three weeks ago, said it is still too early to provide any details about the review. Chairman Rosenfeld also stressed that he wants to create a new process for appointing public interest directors. And he said he believes the White House will support his initiative. "Our challenge is to create a board that is truly responsive and appropriate for the business the banks are into today," he said.