NEW OPTION: A proposed jumbo conduit would allow FHLB members "to expand into higher-balance loans in all communities across the country," says Eric Schambow, senior vice president at the Chicago FHLB.

FHLB Conduit Could Entice Small Banks to Make More Jumbo Mortgages

Smaller banks face a tricky choice with jumbo loans: hold them and face rate risk, or sell them to a bigger bank and risk losing a customer. An unusual arrangement between the FHLB and a REIT could offer community banks a better route.

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