July 2014 - FHLBank Atlanta shareholders use a number of different business models for originating residential mortgages. Some originate mortgages strictly for portfolio. Others broker applications or act as a correspondent lender, trading the loan assets and servicing rights for upfront income. Some shareholders originate and sell directly to Fannie Mae or Freddie Mac or issue Ginnie Mae Securities, while others still use a combination of these different models.
To help its shareholders enhance their positions in the secondary market, FHLBank Atlanta now offers MPF Xtra®, a turnkey secondary marketing solution for conforming mortgages.
The Mortgage Partnership Finance® (MPF®) Program was established by FHLBank Chicago in 1997 and today counts 10 of the 12 FHLBanks as participants. Since its introduction, the MPF Program has grown to be the FHLBank System’s largest mortgage purchase program. MPF Xtra was launched in 2008 under the MPF Program to provide small- and medium-sized FHLBank shareholders with improved access to the secondary market. Through MPF Xtra, shareholders sell mortgages via FHLBank Atlanta to FHLBank Chicago, which concurrently sells the mortgages to Fannie Mae. Since its introduction, MPF Xtra has evolved into a national secondary marketing platform and is now one of Fannie Mae’s largest sellers by volume.
MPF Xtra operates similarly to a correspondent model, but with some important distinctions. Shareholders have the benefit of cooperative pricing and have greater control of the origination process from beginning to end, as well as the funding timeframes. They also have the option to retain the servicing rights along with the corresponding cross-selling opportunities. MPF Xtra’s agency-like delivery also can provide operating efficiencies and potential expense reductions. Importantly, shareholders participating in MPF Xtra benefit from a relationship with FHLBank Atlanta, a trusted advisor that understands their entire business and is committed to their long-term success.
Additional features and benefits of MPF Xtra include:
Access to best execution pricing for improved competitive positioning
- Flexible note rate ranges and extensions
- Online loan rate lock capability through eMPF® or the MPF help desk
Quick and easy loan funding
- Choose funding date online via eMPF
- Unique document certification arrangement provides faster access to sale proceeds
Ability to transfer unwanted risk
- Selling under the MPF Program efficiently transfers credit risk, prepayment risk, and interest-rate risk
Ability to retain relationships and processes
- Control the flow: shareholder processes, funds, and closes each loan on their terms
- Option to keep or release the servicing rights enables shareholder to maintain and manage valuable borrower relationships
Participating shareholders also can obtain access to Fannie Mae’s Desktop Underwriter (DU®). The use of DU may result in limited waivers of certain loan origination representations and warrants as to a borrowers’ credit worthiness. FHLBank Atlanta shareholders do not incur the cost of the typical DU implementation fee, representing a significant savings.
Mortgages eligible for MPF Xtra include fixed-rate, fully amortizing conforming, conventional loans for 1-4 family owner-occupied properties (primary or secondary home) with terms of up to 30 years and a maximum loan-to-value of 95 percent. Both purchase and refinance mortgages are eligible. In addition to utilizing DU, shareholders can also underwrite manually and/or use Freddie Mac’s Loan Prospector with certain restrictions. Standard loan-level price adjustments apply.
MPF Xtra is the latest addition to FHLBank Atlanta’s products and services that can support your mortgage business. For more information on how MPF Xtra can help your institution drive higher profits from secondary marketing, please call your relationship manager at 1.800.536.9650.
The Federal Home Loan Bank of Atlanta is not a registered investment advisor. Nothing herein is an offer to sell or a solicitation of an offer to buy any securities or derivative products. You should consult your own legal, financial, and accounting advisors before entering into any transaction.