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December 17, 2021 Changes to our Member Products Policy

At its meeting  this  week,  FHLBank  Topeka’s board of directors approved changes to its Member Products Policy. Details are available in the online   Member Products and Services Guide  and are effective  Jan. 3, 2022. 

 

NO TO LOW COLLATERAL VERIFICATION FEES:   To provide better value to our members,  FHLBank  recently re-evaluated our approach to charging collateral verification fees. Previously, members and housing associates have been charged an hourly rate of $125 per reviewer for the total hours associated with a collateral verification. Our new fee structure will only charge members for engagements beyond 20 hours.   This means that  many  collateral verifications will be complimentary.  
 
TEMPORARY COVID-19 UNDERWRITING REQUIREMENTS:   Previously allowed forbearance plans and modifications for all non-federally backed mortgages will expire Dec.  31, 2021, due to  waning use by members  and the impending  legislative  expiration of  Section 4013  of  the Coronavirus Aid, Relief and Economic Security (CARES) Act. Forbearance plans and modifications that borrowers  entered into  prior to the Dec.  31, 2021, that previously met the COVID-19 Temporary Underwriting Requirements will remain eligible for pledging for the remaining duration of the forbearance plan, modification period or until the asset is paid-off, sold or reaches the maturity date. 
 
ADDITIONAL UNDERWRITING REQUIREMENT RELATED TO LIBOR®-INDEXED LOANS:   On March 5, 2021, the Financial Conduct Authority (FCA) announced the final cessation for LIBOR as of Dec. 31, 2021, for 1-week and 2-month US dollar LIBOR tenors.  

In line with member regulators, we have made changes to our underwriting requirements under Loans (Section I), Other Real-estate Related Collateral (Section IV) and Other Collateral (Section V)  with a note date after December 31,  2021 or LIBOR-indexed loans with a 1-week or 2-month US dollar LIBOR tenor are ineligible. This change is consistent with the message you received on Oct. 7, 2021

 

You will also notice a definition of ICE LIBOR® on pg. 67  of the Member Products and Services Guide to help clarify these eligibility requirements. 
 
If you have any questions about any of these changes, please contact   Lance Liby, chief credit officer, or   Tom Bliss, director of  credit administration, at 785.233.0507. 

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