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FHFA Sets June 2019 Implementation Date for Common GSE Security

Published on March 28, 2018 by Greg Zagorski
FHFA Sets June 2019 Implementation Date for Common GSE Security

Fannie Mae and Freddie Mac will begin issuing a new common mortgage-backed security (MBS) on June 3, 2019, the Federal Housing Finance Agency (FHFA) announced today. The common security, known as the Uniform Mortgage-Backed Security (UMBS), will replace both GSEs’ current MBSs and will be traded through a Common Securitization Platform (CSP) jointly owned and developed by both firms.

FHFA has decided to set a specific date for implementation so far in advance to give the GSEs and other market participants more time to prepare for the transition. FHFA previously published a Market Adoption Playbook outlining steps market participants can take to adopt to the new security. The agency also maintains on its website a comprehensive timeline that outlines the additional steps that need to be taken to develop and implement the UMBS and CSP.

As part of the transition, Freddie Mac has been utilizing the CSP since November 2016 to sell its current single-family MBS, known as Participation Certificates. Fannie Mae will join Freddie Mac in using the CSP on the June 3, 2019, implementation date.