The Perks of Partnership: One CU's Experience with the MPF Program
By: John Speakman, Senior Vice President, Mortgage Lending, Rockland Federal Credit Union
When I joined Rockland Federal Credit Union (RFCU) – a $2.3 billion CU serving five counties in the Rockland, Massachusetts area – I brought years of experience with the Mortgage Partnership Finance® (MPF) Program and its benefits for lenders like us. I’ve participated in the MPF Program since it began more than 20 years ago. Today, it provides secondary market access to members of Federal Home Loan Banks (FHLBanks) nationwide, with a full range of products for a variety of loan types. For RFCU, I chose the MPF Traditional credit risk-sharing products because their design rewards CUs for doing what we do best: serving as true community lenders.
Flexibility to Retain Servicing
Like many credit unions, RFCU is focused on our members and services all our loans, so the option to retain servicing is critical. We’re proud to tell members, you will always be dealing with us. We’re local, we’re here when they need us, and they appreciate that. The servicing fees we earn by choosing this option are a welcome bonus.
No LLPAs
A unique feature of the MPF Traditional credit risk-sharing products is that they don’t charge loan-level price adjustments (LLPAs), which means we can offer more affordable loans. We view this as particularly important to our members, since most homebuyers don’t stay in a house for 30 or even 10 years. The ability to offer a product with fewer fees also provides us with an attractive niche in the market.
Rewards for High-Quality Loans
Like other credit unions, RFCU is more than a producer of loans – we’re a community lender. While we deliver some of our loans into the secondary market, RFCU is a portfolio lender first, and that mindset is borne out in the quality of all our loans. The MPF Traditional products allow us to benefit from this by earning monthly credit enhancement fee income in exchange for retaining a portion of the credit risk for the loans we sell.
Real Partnership
When our members have questions or concerns, RFCU ensures that they have timely access to the people and answers they need; if necessary, members can even call right to the CEO. FHLBanks share this mindset because, like us, they’re member-owned cooperatives. If I need to ask a question or offer feedback, it’s easy to find the information I need or reach the right decision maker at the MPF Program. It’s a true partnership, as it should be.
To learn more about FHLBank membership and how your credit union can partner with the MPF Program, visit fhlbmpf.com.