From the course: Applied Fixed Income

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FHLB, FAMC, and FFCB

FHLB, FAMC, and FFCB

From the course: Applied Fixed Income

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FHLB, FAMC, and FFCB

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- [Instructor] The next US agency I want to talk about is the Federal Home Loan Bank or the Home Loan Bank system. The system was created in 1932 after the Great Depression, and is actually comprised of 11 regional banks across the US that lend funds to local lending member institutions to support housing finance and community investment. Makes them very different from Fannie and Freddie, as they don't actually lend directly for individual mortgages, nor do they hold a retained portfolio. All of their lending is fully collateralized, hence, they escaped relatively unscathed during the GFC, and were not bailed out by the government. As a matter of fact, since the FHLB lends effectively to banks and other financial institutions, they pride themselves on never having ever suffered any credit losses in their history. So therefore, the home loan banks, what we call them, are portfolio lenders, and that's because they hold most, if not all, of the assets they purchase, or loans that they…

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