Friday, August 22, 2014 - Article by: Justin Fitzhugh - Nations Lending Corporation -
Last week, August 12th, 2014, the Federal Housing Finance Agency, FHFA, issued a request for input on its proposed Single Enterprise Mortgage-Back Security, the Single Security. The structuring and issuing of a single security to market and guarantee GSE loans, is part of a larger strategy that is intended to develop a liquid, resilient, and sustainable secondary mortgage market which is attractive to private investors. The structuring of Single Security issued and backed by the Fannie Mae and Freddie Mac, the GSEs or Enterprises, would help on the development of a Common Securitization Platform (CSP) which would ultimately reduce operation costs of these institutions and facilitate a more dynamic marketization of the instrument and greater participation by private investors. The FHFA requests input from the public about this Security; deadline is October 13th, 2014.
THE MAIN GOAL OF THE PROPOSED SINGLE SECURITY
The use of a Single Security is intended to:
To achieve maximum market liquidity, the FHFA and the GSEs need to leverage existing security structures: encompass many pooling features of the existing MBSs and the disclosure framework of current PCs
THE KEY FEATURES OF THE PROPOSE SINGLE SECURITY 
The proposal alerts us to the importance of transforming existing securities issued by the GSEs into whatever become the new security. This is why, the proposal explains, it is important to maintain similar features in the whatever turns out to be the new Security.
The FHFA is looking for input to develop a broad view of the range of public knowledge, opinions and ideas to the following questions:
What key factors regarding TBA eligibility status should be considered in the design of and transition to a Single Security?
What issues should be considered in seeking to ensure broad market liquidity for the legacy securities?
As discussed above, this is a multi-year initiative with many stakeholders. What operational, system, policy (e.g., investment guideline), or other effects on the industry should be considered?
What can be done to ensure a smooth implementation of a Single Security with minimal risk of market disruption?
REMEMBER, we all shape the environment of our industry. You cmay submit your input through this form: https://www.fhfa.gov/AboutUs/Contact/Pages/Request-for-Information-Form.aspx
You can access related resources to this proposal here: http://www.fhfa.gov/PolicyProgramsResearch/Policy/Pages/Single-Security.aspx
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