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Financial Services Law Insights and Observations

FHFA seeks input on GSE pooling practices for UMBS

Agency Rule-Making & Guidance FHFA GSE Fannie Mae Freddie Mac Securities Uniform Mortgage-Backed Security

Agency Rule-Making & Guidance

On November 4, the FHFA issued a Request for Input (RFI) on Fannie Mae’s and Freddie Mac’s (the GSEs) pooling practices as they relate to the formation of the “To-Be-Announced”-eligible Uniform Mortgage-Backed Securities (UMBS). The RFI follows the June launch of the UMBS—a common security through which GSE mortgage-backed securities will be issued (previously covered by InfoBytes here)—and seeks input to assist FHFA in determining whether further action or alignment is required to ensure reasonably consistent security cash flows and continued fungibility of the GSEs’ UMBS so they “remain a source of stable, affordable liquidity for the U.S. housing finance system.” In addition, FHFA requests input on whether having more aligned pooling practices could facilitate the issuance of UMBS by market participants beyond the GSEs, and seeks comments on other policies and practices that might affect UMBS compatibility. Comments are due December 19.

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