Federal Home Loan Banks

Browse articles from all of our Newsletters related to Federal Home Loan Banks.

May 24, 2013 - Inside The GSEs

FHFA Rule Spells Out Pay Say Over GSEs, FHLBanks

The director of the Federal Housing Finance Agency would be able to review and revise the take-home pay of Fannie Mae, Freddie Mac and Federal Home Loan Bank executives should the director determine that a senior official’s compensation is “not reasonable or comparable” with the earnings of counterparts in similar businesses, under newly revised agency rule. An interim final rule, published by the FHFA in the May 14 Federal Register authorizes and clarifies the FHFA director’s authority to review and withhold executive compensation at Fannie, Freddie and the 12 FHLBanks in particular. “In view of FHFA’s statutory obligation to prohibit compensation to any executive officer that is not reasonable and comparable, prior review and non-objection rather than review after-the-fact can help set expectations and avoid the need for later remedial action,” explained the Finance Agency.


May 24, 2013 - Inside The GSEs

Inspector General ‘Active’ in FHFA Oversight, Law Enforcement

The watchdog agency charged with overseeing the regulator of Fannie Mae, Freddie Mac and the Federal Home Loan Banks said it plans to remain “active on the law enforcement front.” In its semi-annual report to Congress issued this week, the Federal Housing Finance Agency’s Office of Inspector General gave a tally of its accomplishments for the six-month period ending March 31, noting that it issued 13 audit, evaluation survey and white paper reports, and participated in several criminal and civil investigations.


May 24, 2013 - Inside The GSEs

FHFA: FHLBanks Should Expect Increased Attention

The 12 Federal Home Loan Banks should expect increased “regulatory attention” going forward to ensure their GSE funding advantage remains focused on their mission, the acting head of the Federal Housing Finance Agency told bank directors and executives last week. During a speech at the annual Federal Home Loan Bank Directors Conference in Washington, DC, FHFA Acting Director Edward DeMarco noted that as advances and mortgage assets declined during the economic downturn, FHLBank balance sheets became less “mission oriented.” “Our focus on mission assets is not only an exercise in adhering to the essential mission for which Congress designed the system; it stems from safety and soundness concerns based on recent experience,” said DeMarco.


May 10, 2013 - Inside The GSEs

FHLBank Earnings Decline in First Quarter 2013

Preliminary combined net income for the 12 Federal Home Loan Banks fell 12.3 percent to $580 million in the first quarter of 2013, down from $661 million at the end of the fourth quarter and a 20.9 percent decrease from the same period last year, according to the Federal Home Loan Bank Office of Finance. The FHLBank systems’ $153 million year-over-year decrease was driven primarily by lower net interest income, partially offset by lower assessments and non-interest expense. Total FHLBank assets were $738.7 billion on March 31, 2013, down 3.1 percent from $762.5 billion on Dec. 31, 2012, due to declines in investments, advances, mortgage loans and other assets.


May 3, 2013 - Inside FHA Lending

HUD Closes Offices, Restructures Multifamily Hubs

The Department of Housing and Urban Development has announced plans to consolidate multifamily hubs nationwide and close a number of its smaller field offices. The plan would result in an estimated $61.9 million in annual costs savings for HUD after completion and affect approximately 900 of the department’s 9,300 employees. No employee will be laid off as a result of the restructuring, according to HUD Secretary Shaun Donovan. Donovan said the changes are part of a broader, long-term effort that will allow HUD to continue to deliver high-quality services by adapting modern best practices. The decision to ...


April 26, 2013 - Inside The GSEs

Lehman Sues FHLB Cincinnati for Unpaid Swaps

The Federal Home Loan Bank of Cincinnati says a unit of Lehman Brothers Holdings is not entitled to a multimillion dollar payday because the FHLBank did not short change the firm when it closed out swaps and options transactions ahead of Lehman’s 2008 bankruptcy. Last week, Lehman filed a breach of contract lawsuit in Manhattan federal court connected to 87 derivative transactions or interest-rate swaps with the FHLBank that fell apart when Lehman entered bankruptcy on Sept. 15, 2008, at the height of the financial crisis. According to its lawsuit, Lehman says the Cincinnati Bank violated its agreement by paying only $13.7 million when the transactions were terminated due to the firm’s Chapter 11 filing.


April 12, 2013 - Inside The GSEs

FHLBank of Dallas Joins MPF, Will Offer Xtra Product

In a move designed to allow qualifying members to sell fixed-rate, conforming mortgage loans into the secondary market, the Federal Home Loan Bank of Dallas announced last week it has joined the Mortgage Partnership Finance Program and is now offering the MPF Xtra product. Under the MPF Xtra program, loans are sold through the FHLBank of Chicago to Fannie Mae as a third-party investor.


April 12, 2013 - Inside The GSEs

OIG: FHLB Insurance Advances Need Stricter Review

The Federal Housing Finance Agency’s oversight of the 12 Federal Home Loan Banks’ growing amount of advances to insurance companies should be improved to include tighter coordination with state regulatory authorities, according to the agency’s official watchdog. The FHFA Office of Inspector General’s recent audit noted FHLBank advances to insurance company members have dramatically increased even as overall advances have declined in recent years. From 2005 through 2012, the volume of FHLBank advances to insurance companies increased “over fourfold” from $11.5 billion to $52.4 billion.


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What should be done to “reform” Fannie Mae’s and Freddie Mac’s position in the mortgage market?

Wind the two GSEs down as quickly as possible while setting up some new government guarantee program for conservatively underwritten conventional mortgages.
Let the two GSEs continue to funnel money to the Treasury while developing a plan to take them out of conservatorship as private companies.
Do nothing since the housing market is too dependent on the two GSEs and Congress is unlikely to agree on a major change in the status quo anytime soon.

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