Federal Bank Caps Mortgage Program, Cites Risk
The Federal Home Loan Bank of New York will limited future commitments for mortgage deliveries (MPF) to $100 million per year, per lender." Alfred A. DelliBovi, President of the FHLB of New York made the announcement effective as of March 15, 2005.
"(T)he risks of the program must be managed prudently and in an extremely conservative manner", Mr. DelliBovi said . The Seattle FHLBank said it plans an "exit strategy" for the program. The Seattle and Chicago FHLBank "were ordered over the past year by the system's regulator, the Federal Housing Finance Board, to improve their controls on the interest-rate risks created by mortgage loan investments," according to Dow Jones NewsWire.