DS News

16 FHFA'S MAJOR STEP TOWARDS UMBS SUCCESS As part of its goal to significantly improve the predictability of cash flows to mortgage-backed securities (MBS) investors, the Federal Housing Finance Agency (FHFA) has issued a final rule that requires Fannie Mae and Freddie Mac (the Enterprises) to align programs, policies, and practices that affect the cash flows of "To-Be- Announced" (TBA)-eligible MBS. e agency statement indicated that this is a major step forward. "is rule demonstrates FHFA's commitment to the success of the UMBS, which will promote liquidity and efficiency in the secondary mortgage market," said Joseph Otting, FHFA Acting Director. FHFA's final rule addresses 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 misalignment. 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 GSE's current offerings of TBA-eligible MBS and to the new Uniform Mortgage-Backed Security (UMBS). As reported in DS News, the GSEs will begin issuing the UMBS beginning June 3, 2019. Formulating the common securities are aimed at replacing the Enterprises' current offerings of TBA-eligible MBS, which will be issued through the Enterprises' joint venture, Common Securitization Solutions (CSS), using the Common Securitization Platform (CSP). e FHFA statement explained that after the June 2019 launch, "CSP and CSS will expand to include the administration of multi-class securities and commingled Enterprise UMBS and the production of UMBS disclosures." CSS and CSP will thereafter begin performing bond administration functions for close to 900,000 securities backed by nearly 26 million loans. In September 2018, FHFA had announced that it was issuing a proposed rule to require Fannie Mae and Freddie Mac to align programs, policies, and practices that affect the prepayment rates of TBA-eligible mortgage- backed securities. According to the FHFA, the purpose of the proposed rule is to enhance the overall liquidity of GSE TBA-eligible MBS without regard to which GSE is the issuer. Specifically, the rule is designed for maintaining and improving the efficiency and liquidity of the secondary mortgage market. ON THE WEB WEBSITES TO GET TO KNOW. Project Gutenberg is a free digital library of more than 58,000 e-books. All you need is an internet-equipped computer or phone to read up on any subject, with titles also available in multiple languages. Project Gutenberg provides access to books about law, technology, politics, science, and more, as well as including a large selection of novels. Project Gutenberg's e-books can be read on any device, and books can also be exported to e-readers or printed, all at absolutely no cost. e Project is entirely volunteer-run, with thousands of people working to digitize and proofread all the e-books on the site. SelfControl is a free open-source app for MacOS that allows you to blacklist any site that may be a potential distraction during your workday. Once set, SelfControl cannot be stopped without rebooting your computer. Not even deleting the app can stop SelfControl. Create a blacklist of potentially time-wasting sites—like pretty much all of social media—or gain true focus by limiting yourself to a whitelist of only the sites you list and nothing else. SelfControl is completely free and open-sourced, but is currently only available for macOS. Google Keep is a pad of sticky notes for your desktop. Jot down quick lists and notes and take them with you with the web app and mobile app integration, with just your Google account. Add the Google Keep extension to your web browser to keep tabs on web pages you've visited and keep all of your ideas together. Google Keep is as simple as a physical pad of sticky notes: make and sort lists and organize your ideas in one convenient place, with color coding and labels for added organization. Google Keep, like most Google apps, is completely free to use. SELFCONTROLAPP.COM 2 GUTENBERG.ORG 1 GOOGLE KEEP 3

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