America's Community Bankers recently held its annual National Real Estate Lending Conference in Scottsdale, Ariz., and made the following announcements:
Community Banks are just as likely to hold mortgages in their own portfolios as they are to sell them into the secondary market. Furthermore, the number of community banks that do sell loans to the secondary market are equally likely to sell them to private sector participants as they are Fannie Mae and Freddie Mac. These findings are based on an ACB survey, which tallied responses from 335 community banks sponsored by the Office of Thrift Supervision.
Three Federal Home Loan Banks are working on a program to give lenders another option in the secondary market, which would allow member institutions to retain the credit exposure portion of the loans at the local level, paying a guarantee fee and a separate insurance fee.
The program is being planned by the Indianapolis, Cincinnati, and Seattle FHLBanks and is scheduled to be introduced May 31. The program is intended to reward member institutions for credit judgement. According to reports, the plan will operate similarly to the mortgage partnership programs operated by six other FHLBanks.