Pilot Mortgage Program Proposed by the Federal Home Loan Banks of Cincinnati, Indianapolis, and Seattle

FEDERAL HOUSING FINANCE BOARD

[99-N-10]

Pilot Mortgage Program Proposed by the Federal Home Loan Banks of

Cincinnati, Indianapolis, and Seattle

AGENCY: Federal Housing Finance Board.

ACTION: Notice.

-----------------------------------------------------------------------

Background

Pursuant to the procedures set forth in Federal Housing Finance

Board (Finance Board) Resolution 97-70 (November 12, 1997), the Finance

Board is publishing notice of receipt of an application from the

Federal Home Loan Banks (FHLBanks) of Cincinnati, Indianapolis, and

Seattle to initiate a pilot program. As specified in the procedures,

the Finance Board will not act on the application during the 30-day

notice period and will consider any comments received during the notice

period before taking action.

SUMMARY: The Finance Board has under consideration a proposal submitted

jointly by the FHLBanks of Cincinnati, Indianapolis and Seattle to

initiate a pilot program to purchase mortgage loans from member

financial institutions under a credit risk sharing arrangement. Under

the proposed Mortgage Purchase Program, or MPP, the FHLBanks could

purchase fixed-rate, single family mortgages from member financial

institutions subject to the establishment of a risk-sharing account

designed to transfer a substantial portion of the credit risk to the

member financial institution. In addition to the risk-sharing account,

the member would further credit enhance the mortgage loans by providing

supplemental mortgage insurance. The MPP is designed to provide member

financial institutions with another alternative to selling mortgages in

the secondary market, and the FHLBanks with a means to increase

mission-related activities.

FOR FURTHER INFORMATION CONTACT: Scott Smith, Deputy Director, Office

of Policy, Research and Analysis, (202) 408-2991, Federal Housing

Finance Board, 1777 F Street, NW, Washington, DC 20006.

Dated: August 6, 1999.

Bruce A. Morrison,

Chairman.

[FR Doc. 99-20797 Filed 8-11-99; 8:45 am]

BILLING CODE 6725-01-P