giving the 12 Home Loan banks more leeway in forming partnerships with financial institutions to originate and securitize mortgages.

In a trend that began in late 1996, the Home Loan banks began buying mortgages from member banks and thrifts, and then securitizing the loans. The Home Loan banks share the credit and interest rate risk with the mortgage originator. On Monday the finance board gave them more options to customize these risk-sharing agreements.

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