Life insurers binge on US financing aimed at helping housing
December 05, 2023 by Major life insurance companies have been borrowing billions of dollars from Federal Home Loan Banks (FHLBs); money that is meant to increase affordable housing. Insurers have access to the system because they provide mortgages, and have justified their aggressive drawing on FHLBs stating they invest in residential mortgages and related securities. However, this has not helped the issue; insurance firms have had billions of dollars in profits by investing the borrowed money in areas such as commercial real estate mortgages and corporate and government bonds. The low cost of borrowing they get from FHLBs is much cheaper than elsewhere.