By Chris Endicott
The Federal Home Loan Bank of Topeka recently decided to join several other FHLBanks and move forward with the MPF Government MBS product.
With this product, FHLBank members that participate in the Mortgage Partnership Finance Program can generate loans that are eventually placed into MBS pools securitized and guaranteed by the Government National Mortgage Association (Ginnie Mae). Why has FHLBank Topeka decided to move forward with this product now?
To Better Serve Our Members
The Federal Home Loan Banks are owned by our members. Because of our cooperative nature, we feel an obligation to search for every opportunity to provide our financial institution members the best products and services to fit their needs. The MPF Government MBS product meets that qualification.
Through the MPF Government MBS product, the MPF Program purchases 30- and 15-year fixed-rate mortgage loans originated by participating Federal Home Loan Bank members that are insured or guaranteed by the FHA, VA and USDA through its RHS Section 502 loan program.
The Ginnie Mae Partnership Benefits our Members
Ginnie Mae guarantees more than $1.6 trillion of mortgage-backed securities, and the vast majority of government loans are placed in Ginnie Mae MBS. Access to the Ginnie Mae program is critical for government loan originators.
This partnership allows our members to access the benefits of a Ginnie Mae execution, which, due to the size and lower loan volume of some members, would be difficult to achieve on their own.
The Better Execution Couldn’t Be Ignored
While the MPF Program has offered a government option for quite some time, we have always struggled to maintain a truly competitive price on a national level. This partnership with Ginnie Mae allows us to provide our members the ability to receive the benefit of securities pricing with whatever size mortgage volumes they generate.
Better execution means the potential to help more members increase revenues and provide borrowers with additional access to affordable credit.
The Servicing-Released Option Gives All Members Access
In November 2015, the MPF Program added a new feature to the MPF Government MBS product, the ability to deliver loans servicing-released to our business partner, Nationstar Mortgage. Once a servicing-released option became available, the product met the needs of all government loan originators regardless of whether they retain or release servicing.
As a fellow cooperative, we know how valuable your relationship with your members is. We feel the same way about our relationship with you. The goals of the Federal Home Loan Bank System haven’t changed since our inception in 1932—provide reliable liquidity to members and support housing finance and community investment.
The MPF Government MBS product is an example of the Federal Home Loan Bank System striving to find new ways to accomplish these goals by supporting our members’ communities and creating new opportunities.
Chris Endicott is vice president and MPF account manager at FHLBank Topeka. He joined FHLBank Topeka in 2005 in the MPF department. Previously, he worked as a banking center manager.