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49 » VISIT US ONLINE @ DSNEWS.COM FANNIE & FREDDIE CONFIRM UNIFORM MBS LAUNCH DATE Fannie Mae and Freddie Mac announced that they are officially set to launch their first universal mortgage-backed security (UMBS) this summer. is news came on the heels of a recent update to the Securities Industry and Financial Markets Association's (SIFMA) Good Delivery Guidelines. According to Freddie Mac, the GSE will launch its first 55-day, "To-Be-Announced" (TBA)-eligible UMBS on Monday, June 3, 2019. Per SIFMA's Good Delivery Guidelines, UMBS issued by either Fannie Mae or Freddie Mac "will be deliverable into UMBS TBA contracts for settlement," according to Freddie's news release issued on Monday. e statement further explained that Freddie Mac "will no longer issue new Gold PCs with a 45-day payment delay after May 31, 2019." Starting on May 7, Freddie Mac will offer "holders of 45-day, TBA-eligible and non-TBA- eligible PCs and Giants the option to exchange their eligible 45-day securities for 55-day Freddie Mac mirror securities." Full details of how this process will work can be found on Freddie's Gold Exchange PC website. In a separate news release, Fannie Mae announced that "In support of the Single Security Initiative, Fannie Mae will begin accepting forward uniform mortgage-backed security trades with a trade date on or after March 12, 2019, and settlement dates on or after June 3, 2019." e Federal Housing Finance Agency (FHFA) issued its final rule for the UMBS program last week, addressing feedback expressed by commenters on the Notice of Proposed Rulemaking by refining alignment requirements to assure market participants that the GSEs will maintain consistent cash flows. e rule also explicitly outlines the ramifications to the Enterprises of misalign- ment. e announcement also stated that the preamble to the final rule also notes that FHFA has instructed the Enterprises to lower the maximum mortgage note rate eligible for inclusion in an MBS. It indicated that the requirements apply to the GSEs' cur- rent offerings of TBA-eligible MBS and to the new UMBS. In FHFA's statement at the time, Joseph Otting, FHFA Acting Director, said, "is rule demonstrates FHFA's commitment to the success of the UMBS, which will pro- mote liquidity and efficiency in the secondary mortgage market." e common securities are aimed at replacing the Enterprises' current offerings of TBA-eligible MBS and will be issued through the Enterprises' joint venture, Common Securitization Solutions (CSS), using the Common Securitization Platform (CSP). e FHFA previously explained that, after the June 2019 launch, CSP and CSS "will expand to include the administration of multi-class securities and commingled Enter- prise UMBS and the production of UMBS disclosures." CSS and CSP will thereafter begin performing bond administration func- tions for close to 900,000 securities backed by nearly 26 million loans. MR. COOPER GROWS SERVICING PORTFOLIO TO $548B Two key acquisitions—Pacific Union Financial and the Seterus mortgage servic- ing platform—that were closed in February, fuelled Mr. Cooper's business growth during the year. Last month, the company reported that its servicing portfolio grew to $548 billion in 2018, up 7 percent quarter-over-quarter and 8 percent on a year-over-year basis. While the company reported a full-year combined net income of $1,038 million, it re- ported a net loss of $136 million for the fourth quarter, principally driven by a loss of $188 million on the net fair value mark-to-market of its mortgage servicing rights (MSR) portfolio. e change in fair value mark-to- market revenue compared to the prior period was primarily due to a lower interest rate environment, the company said in its filing. "e Company is coming off a period of strong growth and a very high level of activ- ity in 2018, including the WMIH merger, the name change to Mr. Cooper Group, and three acquisitions. Now it's time for us to integrate these transactions and focus on profitability," said Jay Bray, Chairman and CEO of Mr. Cooper Group Inc. On the servicing side, the company said that at year-end, the carrying value of MSR was approximately $3.7 billion. Excluding the mark-to-market, the servicing side of the business earned $88 million in pretax income during the quarter. Mr. Cooper said that excluding $5 million in business shutdown costs, its originations side of the business earned a pretax income of $16 million in the fourth quarter. For the full year, originations earned a combined pretax income of $94 million. Funded loans totaled approximately $5.4 billion, up 5 percent quar- ter-over-quarter, with $2.3 billion from the consumer direct channel and $3.2 billion from the correspondent channel, the company said. "Our fourth quarter results showcased the growth and margins of the company's market-leading servicing platform, and by executing on our servicing transformation initiative, project Titan, we intend to drive further efficiencies and improve the servicing experience for team members and customers," said Chris Marshall, Vice Chairman of Mr. Cooper Group Inc. Mr. Cooper subsidiary Xome, which pro- vides real estate solutions including property disposition and field services to Mr. Cooper and third-party clients recorded a pretax loss of $2 million in Q 4 2018, Mr. Cooper said in its filing. e decline in pretax income quarter-over-quarter was driven by the inte- gration of Assurant Mortgage Solutions and lower exchange property listings sold.

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