| 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.
|
| 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 Authority (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.
