Mortgage loans funded through the Federal Home Loan Banks' program jumped in the third quarter.
The $2.6 billion volume of Mortgage Partnership Finance program fundings rose 41% from the second quarter, but stands 16% below the level a year earlier, the Chicago FHLB announced Monday.
Despite the annual downturn reflecting "the general slow-down of fixed-rate mortgage originations caused by rising interest rates," the bank said it was "pleased to see increased MPF activity during the quarter, as well as the continued growth in member participation."
The number of FHLB members participating in the loan program increased by 20 during the third quarter to at total of 939 lenders nationwide, with "community financial institutions" making up about 83% of the participants, the report said.
Under the program of long-term, fixed-rate mortgages, the lender handles the principal credit risk of the loan and the customer relationship, while the regional FHLB funds the loan and manages the interest rate risk, according to the announcement.
The 90+ day delinquency rate of MPF conventional loans was reported at 0.21%, edging up one BPS from the second quarter.