FHLBs Said to Suspend Admissions of Insurers Used by REITs
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The Federal Home Loan Banks jointly agreed to a three-month moratorium on admitting captive insurers, which are being used by mortgage investors to access the government-chartered system, according to three people with knowledge of the step.
The 12 FHLBs offered the move voluntarily in a letter to their regulator, the Federal Housing Finance Agency, which has voiced concern that the trend is adding risk to the system, said the people, who asked not to be named because the talks are private. Captive insurers largely serve the needs of their parents.