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Market Intelligence

Partnership Makes Sense in Current Mortgage Environment

After years of sustained low interest rates, mortgage lenders are facing a highly competitive market with decreased demand for loans. At the same time, because of the current flat yield curve for U.S. Treasury instruments, fixed interest rates are decreasing slightly.

While many experts agree that fixed rates hovering between 6.25% and 6.50% will not precipitate refinancing demand, lenders still have an opportunity to extend fixed-rate loans to borrowers who currently have adjustable-rate loans due to reset at rates in excess of current fixed rates. Likewise, borrowers with those “exotic” products – such as interest only, option ARMs and varieties of less attractive home equity loans – may be turning back to the classic fixed-rate product.

As you direct your marketing efforts to these borrowers, consider the benefits of the FHLBanks’ Mortgage Partnership Finance^® Program.

The MPF^® Program – Putting the Customer First

Since April of 1999, we at FHLBank Pittsburgh have assisted Participating Financial Institutions with the ability to offer their customers a local solution to their mortgage needs. The MPF Program features competitive pricing options, which include no minimum loan amounts, no pricing “add-ons” or extra fees for refinances, escrow waivers or other lending nuances.

We also do not compete with you for your customers – YOU are our customer. As a valued customer, we assist you with the application process. We do not charge an application fee and we conduct on site training at your office for your staff and provide continual customer service support and assistance.

Fee Income Adds Value to FHLBank Membership

Another quantifiable benefit of the MPF Program is the credit enhancement fee income you receive. This additional fee income grows in conjunction with the volume of loans you sell and becomes a steady income stream each month. Since 1999, FHLBank Pittsburgh has paid more than $80.3 million to members in credit enhancement fee income.

Moreover, the MPF Program’s servicing retained feature allows you to maintain healthy customer relationships without worries that customers become frustrated by a revolving door of loan servicers. Their loan servicing remains with you. To date, FHLBank Pittsburgh has paid participating members more than $251 million in MPF Program servicing fees.

The Power of Partnership

You know your customers better than anyone, and the MPF Program empowers you to control your credit decisions with those customers. Contact Jeff Acquafondata or Peggy Stemmler at 1-800-288-3400 for more information regarding how they can help you enhance the value of your FHLBank membership through participation in the MPF Program.

“Mortgage Partnership Finance” and “MPF” are registered trademarks of the Federal Home Loan Bank of Chicago.