MPF Program: Supporting Strategic FlexibilityBy: Jayne Matthews, Vice President, Mortgage Operations Manager, Harvard University Employees Credit Union
Adapting to the shifting financial landscape and members’ changing needs requires a flexible approach. We all adjust our strategy periodically—for example, when it comes to selling mortgage loans into the secondary market. That’s why the Mortgage Partnership Finance® (MPF) Program has proven to be a beneficial outlet for Harvard University Employees Credit Union (HUECU).
Because HUECU’s 53,000 members are all associated with Harvard or affiliated organizations, student loans are a significant part of our lending focus, but mortgages still comprise roughly 75% of our lending. Sometimes we keep more of these loans on our portfolio, and sometimes we sell more. Having the MPF Program available to us as a secondary market outlet has supported our ability to adjust our strategy and adapt to changing market conditions in a number of ways:
No loan-level price adjustments. For the moment, HUECU has made the decision not to pass LLPAs on to our borrowers; it’s just one more way we’re working to serve our members, and in the recent refinance market it’s kept the pipeline moving more smoothly, too. The fact that the MPF Traditional products also don’t charge LLPAs makes the Program particularly compatible with this approach.
Support and convenience. As a longtime Federal Home Loan Bank member, HUECU initially began participating in the MPF Program because we’d found FHLBank Boston so easy to work with as a funding source. We’ve received the same quality of training and support through the MPF Program—especially at the height of COVID, when they helped us assist members in need of loan forbearance or modification by offering live webinars, on-demand web resources, and phone support. What could have been a much more difficult time, both for our members and for us, became a lot easier. And for the most part, the MPF Traditional products’ underwriting guidelines closely align with Fannie Mae’s, which simplifies the process for our underwriters—especially when they’re reviewing a high volume of loans.
Servicing and credit enhancement fee income. We appreciate the option to retain servicing when selling mortgage loans through the MPF Traditional products, first because our members prefer to continue working with us and second because the servicing fee income we receive provides a nice boost. This has been especially true as we’ve adapted to a rising interest rate environment where new loans have been coming in more slowly than in previous years, and because we haven’t had run-off on payoffs, our servicing portfolio has been growing. We’re also able to benefit from the positive credit risk profiles of the loans we originate by receiving credit enhancement fees—another helpful source of income.
To learn more about Federal Home Loan Bank membership or how the MPF Program could support your credit union’s strategy and resilience, visit fhlbmpf.com.