August 24, 2014

Bloomberg: FHFA plans single bond sales report

July 30, 2014 – Bloomberg reports that the Federal Housing Finance Agency is planning to release a report on its goal to have government-sponsored enterprises Fannie Mae and Freddie Mac issue a single set of home-loan bonds.

Bloomberg cites unnamed sources who say the planned report has not yet been made public but could be released as soon as August. Fannie and Freddie have been under FHFA's conservatorship since 2008.

"Moving to a market in which both companies are issuing common securities may have implications for everyone from home buyers and lenders to taxpayers," the article notes. "Having each entity sell separate securities divides trading, reducing liquidity. That's been especially damaging to the prices of Freddie Mac notes and may prove even more troublesome to the market as rising interest rates slow sales and push investors to try and unload holdings."

Bloomberg also notes that the idea of a single set of home-loan bonds has received public support from the Treasury Department and the Mortgage Bankers Association. It says FHFA Director Mel Watt commented in May that he hopes to move faster on the idea than his predecessor did.

Also in May, FHFA's Bob Ryan said changing to a single security would be "a multi-year effort."

NAFCU continues to advocate for GSE reform that would ensure government guaranteed access to the secondary mortgage market for credit unions and pricing based on loan quality rather than volume.