Having failed last year to phase out the Federal Home Loan banks' investments in conventional mortgage-backed securities, the Federal Housing Finance Board is taking an indirect approach to achieve the same objective.

In a rule proposed last week, the board specified that any mortgage-backed securities purchased after April 12 may be subject to limits the board might approve in the future. The implication is that the Home Loan banks should treat bonds bought after that date differently on their books, because they might need to sell them before they mature.

Observers say last week's proposed rule is an end-run around a defeat the board suffered last year.

Last September the board proposed a rule that would have forced the Home Loan banks to gradually divest themselves of their mortgage-backed securities, in favor of buying loans. But toward the end of joint congressional negotiations on financial modernization legislation last fall, Finance Board Chairman Bruce Morrison decided not to pursue making the proposal a regulation.

In a letter to Sen. Phil Gramm, R-Tex., and Rep. James Leach, D-Iowa, the heads of the Senate and House banking committees, Mr. Morrison said he would not take any regulatory action to limit the banks' assets until after a capital regulation and the banks' capital plans were approved. That is not expected to happen for at least another 18 months.

The rule proposed last September would have phased out purchases of conventional mortgage-backed securities over a five year period by gradually reducing the amount of their debt the banks could use to buy securities, until the debt went only to fund purchases of other types of assets.

In the rule proposed last week, the board defined "core mission assets," or the products it wants the banks to invest in, and left mortgage-backed securities off the list.

Another rule that was finalized last month defined the banks' mission for the first time and required that the banks each submit a strategic plan detailing what products they would offer.

The Home Loan banks' mission, according to the rule, is to "provide to its members and associates financial products and services including but not limited to advances, that assist and enhance such members' and associates' financing of: housing and community lending." This unusual language in the mission statement is a way of discouraging the banks from buying mortgage-backed bonds without explicitly prohibiting them from doing so.By setting out to define what banks should do and requiring them to list their loan products, the board is making it clear that it wants the banks to move away from securities toward buying more loans.

Sources familiar with the issue speculated that Mr. Morrison is trying to discourage purchases of mortgage securities in order to steer the Home Loan banks to the Mortgage Partnership Finance program. That program is being touted as an alternative secondary marketing outlet to Fannie Mae and Freddie Mac.

Alex Pollock, president and chief executive officer of the Chicago Home Loan Bank, acknowledged that if the Home Loan banks have to move out of mortgage-backed securities, they will have to find other ways to earn money, and that increasing their investments in the Mortgage Partnership Finance Program would be one way to do that.

But there is concern among the Home Loans banks that they will have a hard time dealing with the transition out of mortgage-backed securities when they also have to comply with the upcoming risk-based capital rule.

The Finance Board says that the Home Loan banks earn a huge spread on mortgage-backed securities because of their low borrowing costs, but that this activity is not part of the Home Loan banks' mission.

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