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DS News May 2017

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ยป VISIT US ONLINE @ DSNEWS.COM 13 THE LEADER IN DEFAULT SERVICING NEWS Help shape the next issue of DS News. Drop us a line at Editor@DSNews.com. FHFA DELAYS UNIFIED MBS PLANS UNTIL 2019 e Federal Housing Finance Agency announced that Release 2 for its Single Security Initiative and Common Securitization Platform (CSP) for Fannie Mae and Freddie Mac will come in mid-2019. Release 2, the announcement stated, will allow Fannie Mae and Freddie Mac to use the CSP to issue a single, common security to be called the Uniform Mortgage-Backed Security, or UMBS. FHFA had planned Release 2 for 2018, but said it needs more time to develop the programs fully. e plans are ambitious. According to FHFA's update report on Release 2, the agency has two main objectives in undertaking the UMBS initiative. e first is to establish a single, liquid market for the mortgage-backed securities issued by both GSEs that are backed by fixed-rate loans. e second is to maintain the liquidity of the market over time. "Achievement of these objectives would further FHFA's statutory obligation and the Enterprises' charter obligations to ensure the liquidity of the nation's housing finance markets," the report stated. "e Single Security Initiative should also reduce the cost to Freddie Mac and taxpayers that has resulted from the historical difference in the liquidity of Fannie Mae's Mortgage-Backed Securities and Freddie Mac's Participation Certificates." Freddie Mac has been using the data acceptance, issuance support, and bond administration modules of the CSP for activities related to its current single-class, fixed-rate securities participation certificates. "With Release 2," the agency stated, "both enterprises will use the modules and issue UMBS." FHFA Director Melvin L. Watt said, "e CSP and single security are ambitious projects. I am very pleased with the hard work and determination of all those involved who helped make Release 1 a success and laid the foundation for successful implementation of Release 2." Watt added that he is grateful for the support and input received from the public and from industry participants. "I encourage all market participants to begin moving forward with their preparations to make the changes they will need to accompany implementation of the Single Security Initiative," he said. e update also described other milestones reached, costs related to the CSP, and specific steps being taken to ensure alignment between the GSEs. is, FHFA stated, is "central to the success of the single security, and to enhancing the liquidity of the secondary mortgage market on an ongoing basis. The percent of homes underwater at the end of 2016. Source: Zillow Q4 2016 Negative Equity Report STAT INSIGHT 10.5%

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