Private-label mortgage-backed securities (MBS) held by the Federal Home Loan Bank of Boston may cause the federal bank to take deeper writedowns than previously reported, the Wall Street Journal reports.
The previous writedown announced by the bank totaled $339.1 million (a loss of $73.2 million for 2008). A filing with the Securities and Exchange Commission indicates that further writedowns are likely.
In a letter to member CEOs and chief financial officers, Boston Fed President and CEO Michael A. Jessee said that recently obtained details regarding the bank's assessment of other-than-temporary impairment (OTTI) of certain MBS have required the bank to delay the filing of its 2008 annual report.
"We regret the delay and apologize for any inconvenience it may cause," Jessee wrote. "We are working diligently to complete the OTTI assessment and will be back in touch with you once the 2008 Annual Report on Form 10-K has been filed."
SOURCE: Wall Street Journal, Boston Fed