BOSTON – Federal Home Loan Banks in Boston, Seattle and San Francisco announced big third quarter losses last week, based on write-downs of their private-label mortgage-backed securities holdings, in a similar way that corporate credit unions weighed down by MBS are reporting large losses.
The FHLB Boston reported a $105.4 million loss for the quarter driven by a credit loss of $174.2 million on its private-label MBS; the Seattle Bank reported a $93.8 million third quarter loss; and the San Francisco Bank an $85 million loss.
Earlier in the week, FHLBs in Chicago and Pittsburgh reported losses of $150 million and $40 million, respectively.
The losses at the FHLBs are triggering various cost-cutting measures, including employee lay-offs, suspension of dividends and stock buybacks, and reduction in Affordable Housing Program grants.
