MPF Originations Plunge Year-Over-Year

Federal Home Loan Bank originations under the Mortgage Partnership Finance program totaled $7.6 billion in the second quarter, down 66% from those of a year earlier, though up from $4.6 billion in the first quarter, according to the Chicago FHLBank.The year-over-year decline far exceeds the overall slowdown in the mortgage market. (Preliminary estimates by National Mortgage News indicate that second-quarter originations are down 28% from the same quarter of last year.) In 2003, the MPF program funded $72.1 billion in single-family loans, including $22.6 billion in the second quarter. A Chicago FHLBank spokesman said the drop in originations reflects the slowdown in the mortgage market and the increased preference for adjustable-rate mortgages. The nine participating FHLBanks in the MPF program purchase only fixed-rate mortgages.