[Federal Register Volume 64, Number 214 (Friday, November 5, 1999)]
[Notices]
[Pages 60448-60449]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-29027]


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FEDERAL HOUSING FINANCE BOARD

[99-N-16]


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

AGENCY: Federal Housing Finance Board.

ACTION: Notice.

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SUMMARY: On October 4, 1999, the Federal Housing Finance Board (Finance 
Board) adopted Finance Board Resolution No. 99-50 (Res. 99-50) 
authorizing Federal Home Loan Banks (FHLBanks) to offer single-family 
Member Mortgage Asset (MMA) programs within certain defined parameters, 
terms and conditions, including the Mortgage Purchase Program (MPP) 
proposal that was jointly submitted to the Finance Board by the 
FHLBanks of Cincinnati, Indianapolis and Seattle. Notice of the 
proposed MPP program was published in the Federal Register on August 
12, 1999, 64 FR 44016, and the application was subsequently made 
available to the public through the Finance Board's website, 64 FR 
49187 (September 10, 1999). While it is not obligated to provide 
further notice of the MPP program before it is implemented, the Finance 
Board hereby provides notice that the MPP program will not be 
implemented by the FHLBanks of Cincinnati, Indianapolis or Seattle 
until the staff of the Office of Supervision has conducted a pre-
implementation examination of each FHLBank and has confirmed that 
appropriate program policies, procedures and controls have been 
established at each FHLBank. In no case shall implementation occur 
prior to 30-days from the date of this notice.

DATES: Comments must be received in writing on or before December 6, 
1999.

ADDRESSES: Individuals wishing to submit comments should provide 
written comments by mail to: Elaine L. Baker, Secretary to the Board, 
Federal Housing Finance Board, 1777 F Street, NW, Washington, DC 20006. 
Comments will be available for public inspection at this address.

Background: The FHLBanks of Cincinnati, Indianapolis and Seattle 
jointly submitted to the Finance Board a proposal to initiate a pilot 
program to purchase fixed-rate, single-family mortgages from member 
financial institutions subject to the establishment of a first loss 
account through which the member financial institution bears 
responsibility for losses up to the amount of expected losses on the 
mortgages or mortgage pools. The member would provide additional loss 
coverage through supplemental loan-level mortgage insurance from a 
mortgage insurer rated not lower than double-A.
    Res. 99-50 authorized the FHLBanks to establish and operate MMA 
programs, a generic designation for programs that efficiently allocate 
mortgage risks so as to best use the core competencies of the entities 
involved, provide appropriate capital treatment to the participating 
financial institution members, and provide capital market funding and 
risk management alternatives, all for the ultimate benefit of 
consumers. MPP, as

[[Page 60449]]

proposed, conforms to the provisions of Res. 99-50 and the FHLBanks of 
Cincinnati, Indianapolis and Seattle were thereby authorized to 
establish and operate MPP as a program, pursuant to the provisions, 
terms and conditions of Res. 99-50.
    The terms and conditions of Res. 99-50 require, among other things, 
that Finance Board staff determinations regarding a FHLBank's request 
to operate a single-family MMA program shall be subject to a pre-
implementation safety and soundness examination. Therefore, the MPP 
program will not be implemented by the FHLBanks of Cincinnati, 
Indianapolis or Seattle until the completion of a pre-implementation 
examination, and in no case shall implementation occur prior to the end 
of the 30-day notice period provided hereby. This notice applies only 
to MPP and not to previously authorized and currently operating MMA 
programs that have already undergone pre-implementation and other 
safety and soundness examinations. Comments on the concept of MMA may 
be submitted to the Finance Board on or before December 27, 1999 in the 
context of the Finance Board's ongoing Financial Management and Mission 
Achievement rulemaking proposal, 64 FR 52163 (September 27, 1999). In 
this regard, the Finance Board is making Res. 99-50 available through 
its website (http://www.fhfb.gov) in the ``What's New'' section

FOR FURTHER INFORMATION CONTACT: Christina K. Muradian, Senior 
Financial Analyst, Office of Policy, Research and Analysis (202) 408-
2584, Federal Housing Finance Board, 1777 F Street, NW, Washington, DC.
Bruce A. Morrison,
Chairman.
[FR Doc. 99-29027 Filed 11-4-99; 8:45 am]
BILLING CODE 6725-01-P