News

At its recent meeting, FHLBank Topeka’s board of directors approved several changes to FHLBank’s Member Product Policy. A complete list of changes impacting members is identified below. Please note there were no changes made to collateral haircuts. Details are available in the online Member Products and Services Guide (MPSG). Policy changes are effective immediately.   

Underwriting Requirements Modified to Improve Transparency – Several underwriting requirements on loan collateral were amended in order to align policy with current collateral verification practices.    

• Note extensions, modifications, assumptions, endorsements, and/or renewals must contain “wet” signatures from all borrowers and the original documents must be retained. 

• Reverse mortgages may be considered as eligible collateral on a case-by-case basis. 

• Loans on property subject to a leasehold must be a Qualifying Leasehold (under a lease of not less than 99 years that is renewable, or under a lease having a period of not less than 50 years to run from the date the mortgage was executed). 

• In order for a mortgage loan to be eligible collateral, all notes tied to the same mortgage must be eligible and pledged to FHLBank. 

• Loans may not be pledged to other creditor(s) or in multiple FHLBank collateral asset categories, nor can the loan share collateral with loan(s) pledged to other creditor(s). 

• Appraisals on loans with an original amount of $250,000 or greater, must be prepared by a licensed or certified appraiser. 

• Lease loans are not eligible collateral. 

• Loans on property located outside the United States are not considered eligible collateral. 

• Residual or subordinated tranches on commercial mortgage backed securities less than 100% defeased are not eligible collateral.   

Click here to go to the Schedule of Eligible Collateral in the MPSG. 

Additions or Removals – Some underwriting requirements or collateral classifications have been removed or changed.  

• Maximum individual lending values have been applied as described below: 

  •  $10 million for residential real estate loans (i.e. Conventional, FHA-insured, VA-guaranteed mortgages), Second mortgages on single family residential properties, and single family residential construction loans. 

  • $50 million for multi-family real estate, commercial real estate, and multifamily and commercial construction mortgage loans.  

• Temporary Liquidity Guarantee Program (TLGP) fixed and floating rate debt securities have been removed from the list of eligible collateral due to the expiration of the TLGP. 

• Interest only commercial real estate loans may be considered on a case-by-case basis.   

Click here to go to the Schedule of Eligible Collateral in the MPSG. 

• Members delivering loans should notify FHLBank of loans that have been paid off, sold or have matured. These loans should not be included as eligible collateral. Click here to go to this section of the MPSG. 

• Delinquency and internal watchlist reports may be required to be submitted (i.e. collateral verifications, monitoring of delivered collateral). Click here to go to this section of the MPSG. 

• If using a third party servicer, servicing agreements must be submitted for review to ensure there are no contractual provisions that could impede FHLBank’s ability to: (a) receive applicable cash flows from the servicer; or (b) transfer ownership of the underlying loan(s) or servicing rights, if applicable, in the event FHLBank would become party to the agreement due to a members’ event of default. Click here to go to this section of the MPSG. 

• Eligible collateral for insurance companies has been expanded to include whole loans. Insurance company members will be assessed a quarterly pricing fee of $40 per loan. This pricing fee may be applied in the future to other types of members delivering loans. Click here to go this section of the MPSG.  

If you have any questions about these changes, please contact your regional account manager or the Lending Desk at 800.809.2733.