The Federal Housing Finance Agency (FHFA) issued a final rule requiring Fannie Mae and Freddie Mac to align programs, policies and practices that affect the cash flows of certain Mortgage-Backed Securities (MBS). The rule is intended to help improve the predictability of cash flows to MBS investors.
The rule will apply in instances where a “to-be-announced” MBS is offered to settle a trade for an actual MBS that will be delivered at a later date and time. Such securities are announced 48 hours prior to the established trade settlement date.
Find out more details about the rule and commentary that was considered.