Mortgage Servicers to Take Center Stage in Shift to Uniform MBS
- Reform’s success lies in speed convergence between GSEs
- Investors to also focus on underlying loan characteristics
Prospective home buyers arrive to tour a house for sale in Dunlap, Illinois.
Photographer: Daniel Acker/BloombergThis article is for subscribers only.
Mortgage loan servicers will be thrust into the spotlight as the success of the so-called Uniform MBS set to launch on June 3 is highly dependent on the continued convergence of prepayment speeds seen in Fannie Mae and Freddie Mac securities.
As U.S. homeowners can prepay their mortgages at par without penalty -- making prepayment speeds a crucial component in the pricing of mortgage bonds and rates -- the Federal Housing Finance Agency releases quarterly prepayment monitoring reports as the “consistency of prepayment rates is important to the success of UMBS and to the efficiency and liquidity of the secondary mortgage market,” according to the agency.