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Mortgage Partnership Finance® (MPF®) Program

Introduced in 1997, the MPF Program gives residential mortgage originators that are members of the FHLBank System a competitive alternative to selling their mortgages to secondary market agencies. Since its inception, the program has already assisted hundreds of thousands of households nationwide with their home financing needs. Click here for a more comprehensive description of the MPF Program.

  • The MPF Program combines the credit expertise of a local member with the funding/hedging advantages of a regional FHLBank to provide a more profitable alternative to funding mortgages
  • Members can sell their fixed-rate mortgages but pay no guarantee fees
  • FHLBank Pittsburgh pays a credit enhancement fee to participating members for managing the credit risk of the loans

Based on risk tolerance, remittance type and the dollar amount of production, program options include closed-loan purchases and actual/actual or scheduled/scheduled remittance. Choose from:

  • Original MPF®
  • MPF Government
    • FHA
    • VA
    • RHS 502
  • MPF® Plus

All MPF Program options offer electronic access through the eMPF™ Web site for easy online submission and instant status reports as well as the usual manual method of conducting business. The eMPF Web site is a secure transactional site that makes it possible for members to conduct secondary market transactions in a high-speed, safe environment over the Internet.

An FHLBank member institution originates a conventional, FHA or VA fixed-rate mortgage loan and makes the decision to sell it via the MPF Program.

Value: The FHLBanks buy conventional, FHA and VA and Guaranteed Rural Housing Section 502 loans, which makes the benefits of the MPF Program — competitive pricing and increased profitability —- available for an increased number of originations.

The MPF Program offers the member a variety of transactional structures to accommodate different lender preferences and risk tolerances and assures same-day funding.

Value: Members choose the MPF structure that suits their unique needs — assuring efficiency and top execution for each situation.

Through the MPF Program, the FHLBanks are the only secondary market agency to offer same-day funding — providing funds faster to member institutions. The customer relationship and credit risk (in varying degrees, depending on the MPF structure used) are managed by the local member.

Value: The member retains the vital customer relationship —- keeping the door open to cross-sales.

Credit risk is most effectively managed by the professional closest to the loan. The member controls the underwriting — leading to more approvals of quality loans. Because credit risk remains with the originating member, no guarantee fee is charged by FHLBank. Instead, FHLBank pays a credit enhancement fee to the member that is managing credit risk.

Value: "No guarantee fee" means a significant cost savings to the member institution.

The payment of a credit enhancement fee to the member provides additional fee income. FHLBank handles the funding, interest rate and prepayment risks.

Value: These risks are managed by an entity knowledgeable about global capital markets and the hedging of interest rate risk — assuring astute strategic decisions and a sense of security for the member.

The member either services the loan, retaining servicing fee income, or chooses the servicing released alternative and sells the loan to the FHLBank and the servicing to an approved PFI servicer.

Value: Again, the valuable customer relationship is maintained — promoting cross-sales and strengthening this key relationship.

FHLBank and the member institution combine their respective strengths to better manage the risks inherent in long-term mortgages.

Value: Each partner is responsible for what it does best — resulting in an efficient and mutually beneficial structure.

The FHLBanks are owned by their member institutions. Therefore, FHLBank shares all financial advantages with its stockholders via competitive MPF pricing and fees — leading to an improved bottom line for members.

Value: Participating members provide their valued customers with a vital service — an affordable means to purchase or refinance homes of their own.

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

 

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& West Virginia


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