|
Products & Services «
Mortgage Partnership Finance Program »
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.
Benefits 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
Program Options
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
- 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.
Program Functioning
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.
|
Serving our members in Delaware, Pennsylvania
