FHFA Announces Date for GSE Common Security Debut

The Federal Housing Finance Agency (FHFA) has announced the government-sponsored enterprises (GSEs) will begin issuing a new common security called the Uniform Mortgage-Backed Security (UMBS) on June 3, 2019. The new security, which will be issued through the GSEs’ joint venture Common Securitization Solutions (CSS) using the Common Securitization Platform (CSP), will replace the current offerings of TBA-eligible mortgage-backed securities. 

"The transition to the new, common security requires planning, investment, and preparation by a wide variety of market participants," said FHFA Director Mel Watt. "We have now set the specific date that the Enterprises will start issuing the UMBS and I urge the industry to get ready now to ensure smooth, successful implementation."

 

According to the FHFA, Freddie Mac has been using CSS operations for Data Acceptance, Issuance Support, and Bond Administration activities related to current single-class, fixed-rate, mortgage-backed securities since November 2016. CSS has been using the CSP to process about 1,000 new securities each month and performing monthly bond administration functions related to 260,000 single class securities backed by approximately 9.8 million loans. When the UMBS is officially launched, CSS and the CSP will then be performing bond administration functions for about 900,000 securities backed by nearly 26 million loans.

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