The total book value of the Federal Home Loan Banks’ eligible collateral was up 21 percent in 2016, rising to $2.8 trillion from $2.3 trillion, according to the Federal Housing Finance Agency’s recently released report to Congress highlighting the amounts and types of collateral pledged to the FHLBanks.Advances over the same period rose by 11 percent from $634 million to $705 million. Reported borrowing capacity was $2.1 trillion. Single-family and multifamily residential loans accounted for the majority of the book value of collateral, both eligible (61 percent) and pledged (58 percent).

Fannie Affordable Housing Challenge. Fannie Mae launched a $10 million challenge to help address the affordable housing crisis. Through the Sustainable Communities Innovation Challenge, the GSE will commit $10 million over two years to attract promising ideas that will help alleviate affordable housing issues. Fannie expects to receive proposals from across the public, private, and nonprofit sectors. Maria Evans, Fannie’s vice president of sustainable communities’ partnership and innovation, said, “With the Challenge, we are looking for new concepts, designs, and ways of solving our nation’s affordable housing issues from innovators who are working inside and outside of the traditional housing industry. Great ideas can come from anywhere.” The goal is to...

The Federal Home Loan Bank of Seattle lost an appeal in an MBS case against Barclays Capital this week in which it claimed the investment banker made false statements or left out certain facts about the securities it sold in 2008. But the Court of Appeals of Washington State ruled that theFHLBank was fully aware of what it was buying at the time.

Banks and thrifts reported holding $575.4 billion of Federal Home Loan Bank advances at the end of September, a quarterly increase of 1.7 percent and the largest volume of advances in the past 12 months, according to an analysis by Inside The GSEs. That number is also well above the number of advances that were made in the third quarter of 2016. Year-over-year, third quarter advances were 6.2 percent higher than the $541.8 billion reported a year earlier. While JPMorgan Chase remains in the number one spot with $63.8 billion in advances, that was down 6.9 percent from $68.5 in the second quarter, and 19.8 percent below the level a year ago.

Consumer advocates are pushing for changes that could impact the non-agency market, including raising concerns about the use of Federal Home Loan Bank advances and calling for revisions to standards for qualified mortgages. In a letter this month to the Federal Housing Finance Agency, a group of 136 consumer advocates were critical of Starwood Property Trust’s recently disclosed use of FHLBank advances to fund acquisitions of non-QMs. Starwood is a real estate investment ...

The Federal Home Loan Bank System saw a 4.5 percent year-over-year increase in advances during the third quarter of 2017. The FHLBank’s Office of Finance reported that advances stood at $719.4 billion, up from the $688.6 billion a year ago and the $706.8 billion reported at the end of August. The combined net income for the third quarter was $854 million, up from $844 million the previous quarter but down 1 percent when compared to the same period in 2016. The OF attributes that to lower gains on litigation settlements offset by an increase in net interest income.

The Federal Home Loan Banks have grown over the past few years with their total assets surpassing pre-crisis levels, according to a new Federal Reserve report analyzing recent trends and the increased role of the FHLBank system. The Fed noted that the growth coincided with two government policies: the imposition of the Liquidity Coverage Ratio in 2015 and the reform of money market funds a year later. Large banking institutions now have an incentive to borrow more from FHLBanks and less from private short-term money markets thanks to the preferential treatment in the LCR. Also, while FHLBank use of short-term funding has seen an uptick for several years, the report noted...

The Federal Housing Finance Agency wants the government-sponsored enterprises and the Federal Home Loan Banks to hire chief information security officers to head their cybersecurity programs. The new directive was released just after the FHFA Office of Inspector General issued an audit faulting the regulator’s oversight of cybersecurity issues, and in the wake of further revelations about data breaches at Equifax and other large enterprises. The FHFA said Fannie Mae, Freddie Mac and the ...

The Federal Home Loan Banks increased their support for affordable housing in 2016 by 15 percent, according to a new report released this month by the Federal Housing Finance Agency. The report highlights FHLBank low-income housing and community development activities from last year. In all, the FHLBanks helped close to 40,000 low or moderate-income households, including approximately 22,000 very low-income households, become homeowners. Under the program, FHLBank members apply to their bank for Affordable Housing Program funds. Those funds can then be utilized to buy, construct, or rehabilitate affordable housing. The funds can come in the form of either a grant or a subsidized interest rate advance from an FHLBank to its member.

Freddie Simplifies Creation of Giant PCs. Late this week, Freddie Mac announced that it is adding new features to Dealer Direct, its online securitization portal, which will make it easier and faster for dealers to create customized Giant participation certificates. The new Dealer Direct Giant bulk upload feature allows dealers to upload proposed collateral for multiple Giants in a single collateral submission. A unique identifier is used to designate collateral for each Giant. Dealers also now have the option to upload a list of fixed-rate and/or adjustable-rate mortgage collateral without designating securities to specific Giants. Dealer Direct will analyze the individual securities and sort them into the largest possible Giant-eligible groups.