FHLBank Approves Changes to the Member Products Policy
June 24, 2015
At its recent meeting, FHLBank Topeka’s board of directors approved changes to its Member Products Policy. Details are available in the online Member Products and Services Guide (MPSG). Policy changes become effective July 1, and changes to collateral reported via the Qualifying Collateral Determination (QCD) form will be effective with the filing of the Sept. 30, 2015, QCD.
Schedule of Eligible Collateral Changes
Underwriting Requirement Eliminated – The underwriting requirement on conventional mortgages on one-to-four family residential real property for specific pledge members, community development financial institutions (CDFI) and housing associates that required the appraiser to have a Member of the Appraisal Institute (MAI) professional designation has been removed to better reflect what’s commonly required for residential real property. In its place, the following requirements were added: 1) appraisals must be prepared by a licensed or certified appraiser, licensed or certified in the state which the subject property is located; and (2) the appraisal must comply with the Uniform Standards of Professional Appraiser Practices (USPAP).
Delinquency Status Underwriting Requirement Changed - Revised the delinquency status underwriting requirement on all loan asset categories (except for Conventional, FHA insured and VA-guaranteed mortgages on one-to-four family residential real property) for blanket pledge members (excluding CDFIs) from 90 days to 60 days to be more consistent with severe delinquency industry guidelines.
Mortgage Partnership Finance® (MPF®) Program Clarifications
The MPF section of the MPSG was updated to provide additional detail. More information on MPF pricing is supplied as well as a short description of our newest offering, the Member Mortgage Participation (MMP), which gives members the opportunity to participate as an investor in residential whole loan mortgages originated under the MPF Program.
Updates to Mandatory Delivery Conditions for Credit Unions
The new guidelines require a credit union to deliver collateral if it meets one of these conditions: (a) Net worth less than 6.5 percent (previously 6 percent), or (b) Non-Performing Assets to Total Capital plus Loan Loss Reserves greater than 75 percent (previously 100 percent). This change does not result in an increased number of credit union members being placed on delivery and is intended to allow additional time to work through the delivery process.
If you have any questions about these changes, please contact your regional account manager or the Lending Desk at 800.809.2733.
Mortgage Partnership Finance and MPF are registered trademarks of the Federal Home Loan Bank of Chicago.