Fannie Mae and Freddie Mac today announced that the new common security they have been developing — the uniform mortgage-backed security, or UMBS — will be implemented on June 3, 2019. The UMBS will replace the current TBA-eligible MBS issued by the two GSEs. The UMBS will be issued by Common Securitization Solutions, Fannie and Freddie’s joint venture. With today’s announcement, the GSEs and CSS have hit several key development and testing milestones.
The GSEs, along with the Federal Housing Finance Agency, have for years been working on the project of issuing a common security. Freddie Mac began using CSS in 2016 for data acceptance, issuance support and bond administration on its current securities, processing about 1,000 securities each month using the Common Securitization Platform and performing bond administration functions for 260,000 single class securities backed by about 9.8 million loans.
A recent ABA Banking Journal article included information for bankers as both seller/servicers and security owners about preparing for the UMBS.