Analytics Corner: MPF Program Credit Union Participation
on the Rise

Patrick Sullivan
Vice President
MPF Mortgage Analytics
MPF Program

In a mortgage origination landscape where non-depository institutions have steadily increased their market share in recent years, the MPF Program is proud to serve as a preferred source of mortgage liquidity to a growing number of member banks, thrifts, and credit unions. Our consistent focus on providing reliable liquidity, service, and training has resulted in increased member participation, particularly among institutions that face challenges with alternative secondary market investors as the industry changes and non-depositories gain prominence

A notable development over the last several years has been the growth in MPF participation by credit union members. As shown in the graph above, the number of credit unions delivering loans to the MPF Program has tripled since 2009, reaching nearly 150 during 2016. During this time, the share of total MPF loans delivered by credit unions has increased to above 20% as measured by unpaid principal balance. In the first half of 2017, the number of credit union Participating Financial Institutions (PFIs) has nearly met last year’s total and is on pace to continue the growth observed over the last seven years.


As shown in the pie chart, credit union PFIs have used a balanced mix of MPF products. The majority have delivered conventional loans under the MPF Traditional products and have earned Credit Enhancement Fee income for sharing in the credit risk of loans delivered. To a lesser extent, credit unions have opted to use MPF Xtra® for conventional loans, and a smaller but still significant portion of deliveries have consisted of government loans under the MPF Government and MPF Government MBS products.
 
We are encouraged to see this growth in participation among our valued credit union members, and remain committed to providing ongoing liquidity and support for all our PFIs’ residential lending efforts within their communities.
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This newsletter contains forward-looking statements which are based upon our current expectations and speak only as of the date hereof. These statements may use forward-looking terms, such as "anticipates," "believes," "expects," "could," "plans," "estimates," "may," "should," "will," or their negatives or other variations on these terms. We caution that, by their nature, forward-looking statements involve risk or uncertainty, that actual results could differ materially from those expressed or implied in these forward-looking statements, and that actual events could affect the extent to which a particular objective, projection, estimate, or prediction is realized. These forward-looking statements involve risks and uncertainties including, but not limited to, the instability of the credit and debt markets, economic conditions (including effects on, among other things, the housing market), changes in mortgage interest rates and prepayment speeds on mortgage assets, our ability to implement new or enhanced products or programs, and the risk factors set forth in our periodic filings with the Securities and Exchange Commission, which are available on our website at www.fhlbc.com. We assume no obligation to update any forward-looking statements made in this newsletter.
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