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September 23, 2019 Member Products Policy Changes

At its recent meeting, FHLBank Topeka’s board of directors approved changes to its Member Products Policy. Details are available in the online   Member Products and Services Guide (MPSG). Policy changes become effective Nov. 1. Lending values for loan collateral reported via the Qualifying Collateral Determination (QCD) form will be effective with the filing of the Dec. 31, 2019, QCD form.

 

General Guide Changes

More flexibility to pledge Construction-to-Permanent Mortgage LoansWe added a definition for construction-to-permanent mortgage loans under our one-to-four family residential real property category, which is the most pledged loan type among our members. The new parameters allow for loans beyond 360 months in term when factoring in the construction period.

 

Also, within our Residential Construction Mortgage category, a new definition provides more clarity regarding the eligibility of both single-closing construction-to-permanent loans and two-closing construction-to-permanent loans within this category. See page 75 of the MPSG for a full definition.

 

Maximum amount of credit for members with prior approval – We have adjusted the maximum amount of credit for members who have requested exceptions to the standard limit of 40% of total assets. Previously, exceptions could be made by FHLBank senior management up to 55% of assets. The new approved maximum is 50%.

 

Clarity on Anti-Predatory Lending guidelines for residential mortgage loans – We have provided more information on the Anti-Predatory Lending section (Exhibit A) of the MPF Guides. This area can be referenced to determine compliance with applicable predatory lending laws for residential mortgage collateral and MPF Program loans.

 

Lending Value Changes

During management’s recent review of the lending values assigned to each asset, small adjustments to various lending values were made.

 

See a detailed list of the lending value changes.

 

If you have any questions about any of these changes, please contact Lance Liby, chief credit officer, or Tom Bliss, director of member credit analysis, at 785.233.0507.

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