Changes to our Member Products Policy
December 17, 2021
At its meeting this week, FHLBank Topeka’s board of directors approved changes to its Member Products Policy. Details are available in the online?Member Products and Services Guide?and are effective Jan. 3, 2022.
NO TO LOW COLLATERAL VERIFICATION FEES: To provide better value to our members, FHLBank recently re-evaluated our approach to charging collateral verification fees. Previously, members and housing associates have been charged an hourly rate of $125 per reviewer for the total hours associated with a collateral verification. Our new fee structure will only charge members for engagements beyond 20 hours. This means that many collateral verifications will be complimentary.
TEMPORARY COVID-19 UNDERWRITING REQUIREMENTS: Previously allowed forbearance plans and modifications for all non-federally backed mortgages will expire Dec. 31, 2021, due to waning use by members and the impending legislative expiration of Section 4013 of the Coronavirus Aid, Relief and Economic Security (CARES) Act. Forbearance plans and modifications that borrowers entered into prior to the Dec. 31, 2021, that previously met the COVID-19 Temporary Underwriting Requirements will remain eligible for pledging for the remaining duration of the forbearance plan, modification period or until the asset is paid-off, sold or reaches the maturity date.
ADDITIONAL UNDERWRITING REQUIREMENT RELATED TO LIBOR®-INDEXED LOANS: On March 5, 2021, the Financial Conduct Authority (FCA) announced the final cessation for LIBOR as of Dec. 31, 2021, for 1-week and 2-month US dollar LIBOR tenors.
In line with member regulators, we have made changes to our underwriting requirements under Loans (Section I), Other Real-estate Related Collateral (Section IV) and Other Collateral (Section V) with a note date after December 31, 2021 or LIBOR-indexed loans with a 1-week or 2-month US dollar LIBOR tenor are ineligible. This change is consistent with the message you received on Oct. 7, 2021.
You will also notice a definition of ICE LIBOR® on pg. 67 of the Member Products and Services Guide to help clarify these eligibility requirements.
If you have any questions about any of these changes, please contact?Lance Liby, chief credit officer, or?Tom Bliss, director of credit administration, at 785.233.0507.