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.

Bank and thrift members of the Federal Home Loan Bank system had outstanding advances of $565.7 billion at June 30, a quarterly increase of 8 percent, according to an analysis by Inside The GSEs. Year-over-year numbers are also up, with the second quarter of 2017 now 4 percent higher than the $545.6 billion reported in the first quarter of 2016. In fact, the number reported in the second quarter represented the largest volume of advances for the past 12 months. However, the top three advance users were all down for the quarter. Although JPMorgan Chase continues to lead among borrowers with $68.5 billion in advances, it was down some from the $74.3 billion...

Redwood Trust has seen strong demand from borrowers and correspondent lenders for its “expanded prime” program that the aggregator introduced last year. The real estate investment trust’s Choice products allow for somewhat looser underwriting than the super-prime mortgages that have dominated the jumbo market after the financial crisis. The Choice program was introduced in April 2016. Volume has increased relatively quickly and could top $1.0 billion this year. Officials say...

The U.S. Attorney for the District of Texas indicted the former CEO of the Federal Home Loan Bank of Dallas, along with two other former bank employees, for fraud. They were accused of creating fake travel reimbursement requests for lavish trips and embezzlement schemes that began back in 2008. Terrence Smith, at the helm of the bank from 2000 to 2013, and Nancy Parker, chief information officer around the same time, were charged with six counts of making false statements, according to the Department of Justice. And Michael Sims, chief financial officer from 2005 to 2014, was charged with three counts of making false statements.

GSE Conservatorship Hits Nine Year Mark. It’s been nine years since the government placed Fannie Mae and Freddie Mac in conservatorship on Sept. 6, 2008. No one knew it would last this long. Industry groups, along with some lawmakers, are working hard to put the wheels in motion to come up with a more sustainable solution for the mortgage giants. GSE shareholders group Investors Unite suggested, “If Fannie and Freddie could start retaining their profits and rebuild adequate reserves, the Trump administration could lock in reforms already in place and implement others, creating a federal role in housing finance that protects taxpayers.” GSE Hearing Postponed

New CIO for Freddie. Freddie Mac named Stacey Goodman as executive vice president and chief information officer. She will begin on Sept. 25 and brings more than 25 years of technology experience in the financial services industry. In her role, Goodman will lead the Information Technology division and provide corporate-wide leadership for all the company's technology activities. Previously Goodman was executive vice president, chief information and operations officer at CIT. Prior to that she held several roles at Bank of America, last serving as managing director and divisional CIO of global technology & operations. Goodman will be a member of the senior operating committee and will report directly to CEO Donald Layton.