The Federal Housing Finance Agency late Thursday issued a white paper on its plan to create a new mortgage
“The release of this white paper is an important step laying the groundwork for the future structure of the housing finance system,” said FHFA acting director Edward DeMarco in a statement. “Given that the securitization infrastructure could serve as a utility that would outlast Fannie Mae and Freddie Mac as we know them, we look forward to public input from all market participants and interested parties.”
The comment period end Dec. 3.
The 32-page white paper points out that Fannie Mae and Freddie Mac’s secondary market infrastructure is “antiquated and inflexible” and it must be upgraded to ensure an efficient flow of mortgage credit. (Both GSEs have assigned teams working on the new platform.)
“Given that the expenditures for the upgrades are necessary,” it makes sense, the GSE regulator said, to direct Fannie and Freddie to develop a single securitization platform that could be operated as a utility that could support securities guaranteed by the government or private entities.
“The platform could also support servicer compensation based on either a negotiated fee for service or a flat fee strip amount to provide flexibility to implement future changes to servicer compensation,” the white paper says.
