SOFR

The government-sponsored enterprises’ plan to cease accepting loans pegged to the London interbank offered rate a year ahead of its scheduled expiration is expected to hasten action in securitized markets.

Regulators' oversight of the industry's switch to a new interest rate benchmark is expected to intensify as a key deadline approaches.

Freddie Mac launched a groundbreaking multifamily structured pass-through deal that includes a class of floating rate bonds indexed to the Secured Overnight Financing Rate for the first time ever.

Concerns over banks’ level of preparation have led to worries about disruptions in the lending market, and some financial institutions warn that a new interest rate benchmark could cause lenders to pull back on credit.

For the mortgage industry, the question of whether the Fed can control its target range for interest rates is crucial for managing volatility.

Executives sent a letter to the federal banking regulators last month expressing concern that an alternative to the London interbank offered rate could limit credit availability.

Trustees are concerned about obtaining proper consents from legacy residential mortgage-backed securities investors in a timely fashion in order to make the switch from Libor to another index, Fitch Ratings said.

As the clock runs out on Libor, the American Financial Exchange created its own alternative to replace the much-used index.

The Mortgage Bankers Association created a template for originators to notify new borrowers when their adjustable-rate mortgage switches to a different index once publication of the London interbank offered rate discontinues.

Commercial and multifamily mortgage lenders need to figure out their plan for replacing the London interbank offered rate index potentially expiring at the end of 2021.

Although Libor will will not be phased out until at least 2021, Randal Quarles said making the switch early is "consistent with prudent risk management."

The development of a replacement index for the London interbank offered rate brought back memories for one secondary market participant of the technology disaster worries many had at the turn of the century.

An industry working group might seek legislation to eliminate the need for investor consent in the shift to a new benchmark interest rate. But any legislative fix is almost certain to be challenged because choosing an alternative to Libor will inevitably favor one party in a transaction over another.

The Structured Finance Industry Group wants Treasury and the IRS to issue a notice that a change from Libor to an alternative index would not be treated as a taxable exchange.

While the London interbank offered rate won't go dark until 2021, the commercial real estate finance industry should start preparing for the transition now, says the Mortgage Bankers Association.

An effort to increase awareness of the transition to a new benchmark rate, and nudge banks to start preparing, is expected to intensify in 2019.

Fannie Mae has priced more securities that support a transition away from the London interbank offered rate.

Fannie Mae has issued securities supporting the transition away from the London interbank offered rate; something that could become more pressing for lenders if adjustable-rate mortgages were to become more prevalent.