Products and Solutions Guide - Federal Home Loan Bank of Boston

Appendix A – Eligible Collateral and Collateral Valuation cont’d.Eligible Collateral and CollateralValuationEligible Collateral Valuation CommentsFully disbursed whole firstmortgages on owner-occupiedone- to four-family residentialproperty100 percent participation certificatesbacked by this type ofcollateral are the equivalent ofwhole loansFully disbursed whole firstmortgages on owner-occupiedone- to four-family residentialproperty fully insured by the FHAMortgages or other loans, with theexception of SBA and USDA loans,regardless of delinquency status,to the extent that the mortgages orloans are insured or guaranteed bythe U. S. or any agency thereofConventional – up to 80 percent ofunpaid principal balanceNontraditional – up to 75 percent ofunpaid principal balanceSubprime – up to 75 percent ofunpaid principal balanceNote: Nontraditional and subprimemortgage loans are defined inaccordance with Appendix C of thisguide. Eligible mortgage loans thatdo not meet these definitions areconsidered “conventional”90 percent of unpaid principal balancewith a loan level listing85 percent of unpaid principal balancewithout a loan level listingThe maximum valuations are available to Category 1members that choose to provide loan-level data for thesepledged collateral categories. Actual valuation is based onthe Bank’s risk analysis.For Category 1 members that choose not to provideloan-level data for these collateral categories, the maximumvaluations are 75 percent for conventional loans, 65percent for nontraditional loans, and 60 percent forsubprime loans.For Category 2 and Category 3 members, the maximumvaluation is 75 percent for conventional loans, 65 percentfor nontraditional loans, and 60 percent for subprime loans.Actual valuation is based on the Bank’s risk analysis.Borrowing capacity from eligible subprime loans for allmembers is limited to an amount no greater than the lesserof: (i) one-half the member’s total collateral borrowingcapacity; or (ii) two times the member’s most recentlyreported GAAP capital amount.For Category 1 members that provide a loan level listing,the valuation will not exceed 90 percentFor Category 1 members that do not provide a loan levellisting, the valuation will not exceed 85 percent.For Category 2 and Category 3 members, the valuation willnot exceed 90 percent.Collateral valuation for members that list or deliver loans isbased on the Bank’s risk analysis.75 percent of unpaid principal balance Such insurance or guaranty must be for the direct benefit ofthe member pledging the mortgage or loan as collateral.The Bank must be able to perfect its security interest in theinsurance guarantee on such loans.The Bank does not accept loans guaranteed by SBA or theU.S. Department of Agriculture as collateral because theBank is not able to perfect its security interest in theinsurance guarantee of these loans at this time.Appendix AMain Telephone: 617-292-9600 • Customer Service: 1-800-358-9709 • Money Desk: 1-800-357-3452 • Relationship Managers, MPF, and Housing & Community Investment: 1-888-424-3863 49