Fannie Mae, Freddie Mac Single Security Initiative

KPMG’s Defining Issues discusses a Fannie Mae and Freddie Mac initiative resulting in a single mortgage-backed security, known as the uniform mortgage-backed security or UMBS. Investors will be allowed to exchange certain existing Freddie Mac securities for newly issued securities. 

Applicability

Investors in Fannie Mae and Freddie Mac mortgage-backed securities (MBS)

Relevant dates

June 3, 2019 – Fannie Mae and Freddie Mac expected to begin issuing new UMBS

Key impacts

• Similar to current Fannie Mae and Freddie Mac securitization programs, the single security initiative will include three types of securitizations
• Investors can now exchange certain existing Freddie Mac securities for new securities in preparation for the full launch of UMBS in June 2019
• Investors need to consider accounting implications related to the exchange of such securities

Report contents

• Key impacts
• Features of the UMBS
• Exchange of Freddie Mac 45-day securities
• Accounting and other considerations

Related content

• KPMG’s resource page: new financial instruments standards