A recent change to the Bank's Products Policy allows for the acceptance of HELOCs (loans disbursed under open-ended home equity lines of credit) as eligible other real estate-related collateral. HELOCs can be an attractive source of collateral for a member that might be at or close to its borrowing capacity. A member's borrowing capacity with the Bank is limited to the total amount of qualified collateral pledged.

David Trant, assistant vice president, collateral manager, commented, "This increased authority may be attractive to members that hold only a small number of securities and sell a high percentage of their first mortgages. Accessing HELOCs as a source of collateral can provide these members with additional borrowing capacity."

Previously, if a member exhausted residential and securities collateral, it could then use commercial loans under the other real estate-related clause of the policy. As of September 30, 2004, members who find themselves in this situation may be eligible to use their HELOCs as additional collateral.

Members that qualify to pledge HELOCs as collateral must specifically list and provide details for each HELOC with the Bank's Collateral Department. These loans are subject to individual review and acceptance by the Bank.

To find out more about the recent changes to the Products Policy, or for more information on pledging HELOCs (as well as closed-end second mortgages) please contact David Trant at 617-292-9729 or Patrick Green at 617-292-9711.