MPF Loans Jump 36% in 2Q

Loan production under the Mortgage Partnership Finance program jumped nearly 36% in the second quarter, and the Chicago Federal Home Loan Bank purchased its second MPF "Shared Funding" transaction.The Chicago FHLBank reported that single-family MPF loan originations climbed from $16.2 billion in the first quarter to $22.1 billion in the second quarter. (MPF originations in the second quarter of 2002 totaled $4.5 billion.) Over 40 new FHLBank members signed up to participate in the MPF in the second quarter, bringing the total of MPF customers to 530, the Chicago FHLBank said. Nearly 80% are community banks. To appeal to its largest MPF members, the Chicago FHLBank created the Shared Funding program where it purchases highly rate mortgage securities from member institutions. In June, the Chicago bank purchased the senior tranches of a $524 million collateralized mortgage obligation -- backed by MPF loans originated by National City Mortgage and Wells Fargo. The first Shared Funding transaction also involved MPF loans originated by National City and Wells Fargo Home Mortgage. The MPF program can be found online at http://www.fhlbmpf.com.