FHLBs Quadruple Their Mortgage Purchases
The Federal Home Loan Bank Systems said the banks' Mortgage Partnership Finance Program, which buys mortgages on the secondary market, purchased $23.8 billion in home loans in the third quarter, more than four times the $6.1 billion in the same period last year. The program, with which lenders manage the default risk while the FHLB owns the loans, differs from the secondary market purchases of Fannie Mae and Freddie Mac, which charge a guarantee fee for default risk.
The FHLBs' program has $81.5 billion in loans outstanding so far this year, up 66% form the same period last year. Participants in the program, which includes dozens of credit unions, has climbed to 634 institutions.