Defining Issues | May 2019

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

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