WASHINGTON — Though it was once a top priority for the Federal Home Loan banks, the Federal Housing Finance Agency said Thursday that finding a way for the banks to securitize mortgage loans is off the table.

"I do not recommend permitting the FHLBanks to securitize mortgages at this time," agency Director James Lockhart wrote in a report to Congress. "Rather, the FHLBanks may continue to use programs such as MPF Xtra to serve as a conduit for mortgage purchases from their members to a third party that can securitize those mortgages."

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