GSEs to Disclose Servicer Name to MBS Investors
Fannie Mae and Freddie Mac said that come this spring they will begin making six additional "pool specific" disclosures on the mortgage-backed securities they issue.
The two secondary giants announced their new disclosures last month, just hours after a federal task force urged them to do so. (The two were working closely with the task force.)
The six new areas of disclosure include identity of the servicer, loan purpose, original loan-to-value ratio, credit scores of borrowers, property type and occupancy status.
Over the years, some investors have alleged that the two engage in selective selling and purchasing of MBS tranches, because the GSEs have access to certain information that investors do not.
But the task force cleared the two of any allegations of "cherry picking."
One area of disclosure that's of interest to the task force is points paid at settlement.
A new study released by the group notes that points paid at settlement may be "related to likely prepayment behavior."
However, the two GSEs do not collect this information on the loans they purchase.
A Freddie Mac spokeswoman told National Mortgage News that in regard to the new disclosures, the company will start working with its security dealers "immediately to ensure there are no market disruptions."
The task force includes officials from the Office of Federal Housing Enterprise Oversight, the Treasury Department and the Securities and Exchange Commission.
The task force released a 47-page report on mortgage-backed securities disclosures early last week.
FM Watch, which lobbies to contain Fannie and Freddie, said in a statement that it agrees with the task force's conclusion that "additional disclosures by the GSEs are both justified and feasible."
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