The Federal Home Loan Bank of Dallas introduced the Mortgage Partnership Finance^® (MPF^®) Program in 2013, right around the time Lee Cammerer joined the Bank as Mortgage Partnership Finance Manager. MPF in Focus recently spoke with Lee about what it’s been like to establish the program, and why its value is unique.

Why did FHLBank Dallas join the MPF Program?

The MPF Program fits into the core mission of the Bank, to help promote homeownership within the district and provide added resources and access to the secondary market. The Bank believed it would be beneficial for our membership to have access to those tools.

What has it been like to introduce the MPF Program to your members?

A lot of it, initially, has just been raising member awareness. Our member sales staff have in-depth relationships with decision makers at banks and credit unions throughout the district that participate in the mortgage industry. So it’s been a matter of making them aware of the new product offerings, educating them on the products, and ultimately enrolling them in the products.

From the members’ standpoint, it can take time before they feel they understand the program and want to enroll. And then the next step is delivery: What we’re doing with the MPF Program isn’t that much of a departure from the norm, but there’s a ramp-up period. It’s a process of figuring out where the product fits within the framework of the organization we’re partnering with. We don’t know what kinds of internal barriers exist from one organization to the next, so we put some time and effort into understanding those roadblocks so the PFI is able to deliver as soon as training has been completed.

How have your members responded to the MPF Program?

It’s been very well received. The Dallas district is pretty big and geographically diverse, and we have members of all shapes and sizes, so it’s been good to be able to offer different options and opportunities. As time has passed, it’s become a little easier to identify what’s going to be attractive to each member or potential PFI.

Which MPF products have you and your members found most useful?

Initially, we dipped our toe in the water with MPF Xtra^®, and now we’ve shifted our focus to promote the MPF Traditional products that we put on the Bank’s balance sheet: MPF Original, MPF 125, and MPF 35. It’s the MPF Traditional products that the membership seems to be most engaged with, because of the unique income opportunities [credit enhancement fees] that come along with the products; they provide something different from what the industry has to offer.

What benefits have you and your PFIs seen so far?

The unique structural characteristics of our on-balance-sheet MPF products—for example, offering an ongoing credit enhancement fee and the removal of loan-level pricing adjustments—give PFIs a truly different option. There’s just so much of the same thing going on in the market; the fact that we can offer something that’s truly different and can potentially deliver more revenue is always a good thing for our members.

What does FHLBank Dallas hope to gain from its partnership with the MPF Program in the future?

We want to become an active participant in the secondary market for our members, so our goal for the future is to be very active in purchasing mortgages and putting them on our balance sheet. Ultimately, I believe this will add to the profitability of our bank, and I anticipate that those gains will be paid through to our members in the form of potential additional dividends. But most of all, we want to continue providing products that allow access to the secondary market with different potential revenue streams, which we’ve found to be a valuable resource for our members.