WASHINGTON – Freddie Mac is on track to issue mortgage-backed securities via a common securities platform by the end of this year, according to the Federal Housing Finance Agency.
The FHFA on Thursday released an updated timetable for implementing the common securitization platform as well as an update on progress so far. Fannie Mae's use of the common platform is still not expected until 2018.
The FHFA launched the initiative to create a common securitization platform and a single security, both based on the features of Fannie's MBS. The goal is to create a single type of security used by both government-sponsored enterprises. To implement the platform, the FHFA and both mortgage giants have been working to align their policies so that, for example, Fannie and Freddie securities have consistent prepayment speeds.
"Freddie Mac is meeting the milestones that will make the Single Security and a stronger housing finance system a reality," David Lowman, an executive vice president for Freddie, said in a statement.
Freddie is expected to use the common platform through an initial release of the platform this year. "Freddie Mac will begin using the CSP's Data Acceptance, Issuance Support, and Bond Administration modules to perform activities related to its current single-class, fixed-rate securities and certain activities related to the underlying mortgage loans in the fourth quarter of 2016," the FHFA said in its implementation update.
In a press release, FHFA Director Mel Watt said the agency is "confident" that the CSP and single security "should improve the overall efficiency and liquidity of the mortgage market and result in tremendous savings to taxpayers."