News

FSI UPGRADES BANKNET LOAN SERVICING SYSTEM

The Federal Home Loan Bank (FHLB) of Chicago created the Mortgage Partnership Finance (MPF) program in 1997 to provide its member institutions with an alternative to holding fixed-rate residential mortgage loans in their loan portfolios or selling them in the secondary market. Institutions that participate in the MPF program originate loans that are purchased or funded by the FHLBs, but the institutions receive fees for managing the credit risk of the loans and servicing them. The FHLBs manage the interest rate and prepayment risks of the mortgages they acquire, thereby also taking on the liquidity risk arising from holding the loans in their portfolios. The MPF program now offers several product structures, and eight more FHLBs have joined the program. Including New York.

Advantages
· Much-needed competition and balance is added to the secondary mortgage market benefiting mortgage lenders and American homebuyers.
· Mortgage risks are optimally managed through a unique partnership combining the retail credit expertise of a local mortgage lender with the wholesale advantages of a Federal Home Loan Bank. Each partner handles what it does best.
· Community lenders have a more profitable and efficient option than selling mortgages to a secondary market agency.
· Every dollar of MPF funding directly helps an American family purchase a new home or lowers the cost of their existing home, furthering the mission of the Federal Home Loan Banks.

Jack Schunke, President and CEO of FSI, states “Many of our clients have been servicing loans in the secondary market. This program allows the typical FSI clients to improve their interest rate risk and still provide service to their own customers instead of outsourcing this. The process is seamless. Borrowers make the payments through the normal channels, banks’ back office staff processes the payments through the normal channels but on the back end side, we produce various reports and transmit the remittance file automatically.”

Henry Ingrassia, President of Glen Rock Savings said "FSI's recent enhancements have greatly reduced the time we now spend on monthly investor reporting."

FSI currently provides similar capabilities with other secondary market investors, such as Freddie Mac, Fannie Mae and SONYMA. FSI is currently reporting MPF loans to the FHLB’s master servicer, Wells Fargo.

ABOUT FINANCIAL SERVICES, INC.
Financial Services, Inc., located Glen Rock, New Jersey, provides data processing, item processing and Internet services to over 600 clients in the U.S. Founded in 1954, FSI's commitment to quality services for the banking industry has been unparalleled by any other servicer anywhere in the country. As one of the largest independently-owned solution providers to the banking services industry, FSI provides consistent, quality service to banks ranging in size from de novo community institutions to large, multi-billion dollar regionals. Its FSIWebs division provides Web hosting, design and development, as well as co-located, dedicated and managed server solutions. For more information, call 888-374-6200, email rsassos@insidefsi.net, or visit www.insidefsi.net.