FHFA Proposes New Rulemaking on Uniform Mortgage-Backed Securities

Filed in Housing Finance by on September 12, 2018 0 Comments

The Federal Housing Finance Agency (FHFA) announced it is issuing a proposed rule to require Fannie Mae and Freddie Mac (the Enterprises) to align programs, policies, and practices that affect the prepayment rates of “To-Be-Announced” (TBA)-eligible mortgage-backed securities (MBS).

In a press release, FHFA said the objective of the proposed rule is “to enhance the overall liquidity of Enterprise TBA-eligible MBS by supporting their fungibility (mutual interchangeability) without regard to which Enterprise is the issuer.”

The FHFA press statement further added that the proposed rule would require Fannie Mae and Freddie Mac to seek to maintain consistent prepayment rates in order to maintain and improve the efficiency and liquidity of the secondary mortgage market.

The proposal is a part of FHFA’s Single Security Initiative to develop a new securitization infrastructure for Fannie Mae and Freddie Mac.

FHFA is inviting interested parties to submit comments on the proposed rule within 60 days of publication in the Federal Register.

NAHB staff is reviewing the proposal and will submit comments to the FHFA.

For more information, contact Becky Froass at 800-368-5242 x8529.

View the proposed rulemaking notice.

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