Changes to the Member Products Policy
March 31, 2014
At its recent meeting, FHLBank Topeka’s board of directors approved several changes to its Member Products Policy. A complete list of changes impacting members is below. Details are available in the online Member Products and Services Guide (MPSG). Policy changes become effective today and changes for collateral reported via the Qualifying Collateral Determination (QCD) form will be effective with the filing of the March 31, 2014, QCD form.
General Changes to the Member Products Policy
Minimum Advance Size Lowered – The minimum size on member option advances has decreased from $5 million to $2.5 million to align with other advance products with embedded options such as convertible, forward settling advance commitments and other structured advances. This allows more members and housing associates to take advantage of this type of advance.
Prepayment Fee Language Modifications – Prepayment fee language for multiple advance types was modified to provide clarity to members regarding how fees are calculated. Click here to view the language.
Changes to the Schedule of Eligible Collateral
Underwriting Requirements for Home Equity Lines of Credit (HELOCs) Modified – Removed references that the loan must be secured by a second mortgage in order to accommodate situations where the HELOC is secured by a first mortgage.
Definitions – Clarified that in order for an asset to be deemed eligible collateral, the asset must have a readily ascertainable value, be reliably discounted to account for liquidation and other risks, and be able to be liquidated in due course. The first step in evaluating a case-by-case collateral request is to determine if the asset meets the above criteria. If the asset does not meet the criteria, it would not be considered eligible collateral.
If you have any questions about these changes, please contact your regional account manager or the Lending Desk at 800.809.2733.