| Transaction Type |
The Participating Financial Institution
(PFI) may sell closed loans to its applicable Federal
Home Loan Bank (MPF Bank).
|
| Process |
The PFI will obtain a master commitment
from the MPF bank for the amount of loans the PFI
expects to sell and the time period in which it
expects to sell such loans to the MPF bank.
|
| FHA/VA Loan Types |
The MPF Bank will acquire fully amortizing,
fixed-rate, one- to four-unit residential mortgage
loans insured by the Federal Housing Administration
(FHA) or guaranteed by the Department of Veterans
Affairs (VA).
|
| PFI Credit and Servicing
Responsibilities |
The PFI shall provide and maintain
FHA insurance or the VA guaranty for all loans;
the PFI shall be responsible for compliance with
all FHA/VA requirements and for obtaining the benefit
of the FHA insurance or VA guaranty with respect
to defaulted loans. Also, the PFI shall, as the
servicer, be responsible for Unreimbursed Servicing
Expenses (those amounts not reimbursed by the FHA
or the VA with respect to defaulted loans), in the
same manner and to the same extent as is customary
for GNMA loan servicers.
|
| MPF Bank Obligation |
Expenses which are neither covered
by FHA insurance/VA guaranty nor included in the
Unreimbursed Servicing Expenses will be the obligation
of the MPF Bank.
|
| Servicing Fee |
The servicing fee for FHA insured/VA
guaranteed loans is 44 basis points (0.44 percent)
annualized.
|
| Government Loan Fee |
The PFI will be paid monthly a Government
Loan Fee of 2 basis points (0.02 percent) annualized.
|
| Capital Treatment |
For depository institutions, there
is no leverage capital or risk-based capital requirement. |
"Mortgage Partnership Finance"
and "MPF" are registered trademarks of the Federal
Home Loan Bank of Chicago.
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