Mortgage Partnership Finance

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MPF® Plus allows lenders to effectively compete on price with other mortgage lenders based upon the credit quality of their loans.

SUMMARY OF BENEFITS

Competitive execution
Credit Enhancement Fee income paid monthly
Closed loan delivery flexibility
Servicing fee income
Servicing released options available
Electronic processing through the eMPF® website

The structure of MPF Plus allows members added flexibility in delivering closed loans to the FHLB through the addition of supplemental mortgage insurance (SMI) coverage from an approved mortgage insurance (MI) company.

Who would benefit from MPF Plus?
MPF Plus is attractive to members who typically sell their closed loan products to the secondary market, as it provides an alternative when they are deciding on the "best execution" for delivering mortgage loans. MPF Plus would benefit any member actively engaged in mortgage lending that:

Values the income derived from originating and servicing loans

Is currently a member of a participating FHLB
Is accustomed to delivering closed loans

Through the addition of SMI coverage, MPF Plus offers excellent risk-based capital treatment with favorable income and profitability.

Would you value the economic advantages of selling your mortgage assets while retaining your customer relationships and servicing cash flow streams?

FEATURES OF MPF PLUS


	Term .........................................	Up to 30 years fully amortizing
	Maximum LTV.............................	95%
	Loan limits..................................	Agency conforming
	Occupancy..................................	Owner occupied (1-4 units) and second homes
	Property type..............................	All types (except co-ops and investment)
	Underwriting...............................	Follow MPF Origination Guide guidelines (LP/DU decisions considered)
	Remittance.................................	Scheduled/Scheduled
	Master Commitment size.............	$100 million minimum, optional delivery
	Delivery Commitment..................	3, 10, 20, 30, and 45 business days, mandatory delivery
	Pricing........................................	Premium and discount pricing available
	Credit Enhancement fee...............	Includes a fixed and a performance fee paid monthly
	Supplemental MI Policy................	Negotiated between the member and an approved MI Company (coverage requirements set by FHLB)

Under MPF Plus, the first layer of losses (following any primary MI coverage) is paid by the FHLB up to the amount of the First Loss Account (FLA) equal to a specified percentage of the loans in the pool as of the sale date. The member procures additional credit enhancement (CE) in the form of an SMI policy to cover the second layer of losses that exceed the deductible (initially equal to the FLA) on the SMI Policy. Losses on the pool of loans not covered by the FLA and the SMI coverage are paid by the member, up to the amount of the member's CE Obligation, if any, for the Master Commitment. The total CE for the pool of loans in a Master Commitment is set so as to achieve an "AA" rated credit level.

Every month, the member is paid a CE Fee for providing a CE Obligation. The fee is split into fixed and performance fees. The fixed CE Fee is paid beginning with the month after delivery. The performance CE Fees, which are adjusted for loan losses, accrue and are paid monthly, commencing with the 13th month following each delivery of loans. The FHLB absorbs all losses in excess of the SMI coverage and the member's CE Obligation. For depository institution members, the risk-based capital requirement is equal to 100% of the member's CE Obligation. There is zero leverage capital required.*

*The FHLB is not providing accounting or legal advice with respect to the accounting treatment of MPF Program assets and liabilities. The participating member is expected to consult with its own accountants and attorneys for advice on this matter.

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