More MPF Pilots?

The Federal Housing Finance Board is clearing the way for more Federal Home Loan Banks to create "mortgage partnership finance"-like pilot programs to purchase or fund conventional loans originated by their members.The Chicago FHLB has issued $550 million in master commitments through its MPF program and funded $231 million in residential product. "Several other FHLBanks have indicated an interest in seeking Finance Board approval to offer pilot MPF programs to their members," according to a notice in the Aug. 7 Federal Register. "Finance Board staff is hereby giving notice of impending Finance Board action and offering an opportunity for public comment regarding the establishment of approval procedures and criteria, terms and conditions for pilot program operation," the Federal Register notice says. MortgageWire has previously reported that the New York and Indianapolis FHLBs are interested in starting MPF-like pilots. The notice clearly states that the Finance Board is not ready to make the MPF pilot program a permanent program. (The Finance Board was sued for approving the MPF program by a Texas thrift trade group and other plaintiffs. The FHFB won the case, but the plaintiffs are appealing.) The Finance Board is considering raising the current $750 million cap on loans originated under the MPF pilot program.