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Product and Service information for FHLBank Pittsburgh members

MPF Xtra® Product Now Offers Servicing Released Option – Sell the Servicing on Your Mortgages for a Competitive Price
By Deanna Copeland, MPF Product Manager

As our 105 current participating financial institutions (PFIs) know, the Mortgage Partnership Finance^® (MPF^®) Program gives FHLBank members that are residential mortgage originators a competitive alternative to selling their mortgages directly to secondary market agencies. The MPF Program combines the credit expertise you have with the funding and hedging advantages we have to provide you with a more profitable alternative to funding mortgages.

Now, the MPF Program has announced a new servicing released option for the MPF Xtra product. The MPF Program is partnering with Prospect Mortgage to bring this servicing sale opportunity to PFIs. The Concurrent Sale of Servicing option is available to PFIs interested in realizing the value of the servicing rights upfront for loans they sell under the MPF Xtra product.

The MPF Xtra product enables members to offer competitive interest rates for mortgages without assuming any of the credit risk associated with a credit enhancement obligation. Another MPF Program option, the Original MPF product, pays a credit enhancement fee to participating members for managing the credit risk of the loans.

Details of the Servicing Released Option

With the Concurrent Sale of Servicing option, PFIs can sell and deliver fixed-rate mortgages under the MPF Xtra product while having the flexibility to concurrently sell the servicing to Prospect Mortgage for a competitive price. This flexibility allows you to continue to meet the needs of your customers while you take advantage of current, favorable market conditions to keep your balance sheet in line, without the expense of the infrastructure or expertise to service the loans you originate.

You will find this Concurrent Sale of Servicing option extremely attractive if you want the price benefit of the MPF Xtra product and are looking to maximize the value of the related servicing upfront. If you are already an approved PFI, there is no need for a separate approval by Prospect Mortgage. Once you file a new Master Commitment you are eligible to begin selling your MPF Xtra loan servicing.

If you’re not yet a PFI, we encourage you to consider the many benefits the MPF Program offers, including this servicing released option.

For More Information

For more information about the MPF Program, please contact your relationship manager, or get in touch with FHLBank Pittsburgh’s MPF Program team at 1-800-288-3400, x5468 or at pghmpf@fhlb-pgh.com.

DISCLAIMER
The information presented is not investment or business advice, nor is it an offer to extend credit or buy any security or financial product. Readers must not rely on any of this information when making any investment, business or credit decision. FHLBank products are governed by various agreements between FHLBank and its customers, as well as certain FHLBank policies and applicable regulations. In the event of any inconsistencies between information contained in this article and such agreements, policies and regulations, the agreements, policies and regulations will be determinative.

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