Nareit Submits Comments to FHFA on UMBS Pooling Practices

On Jan. 21, 2020, Nareit’s mREIT Council submitted a comment to the Federal Housing Finance Agency (FHFA) responding to its Nov. 2019 Request for Information (RFI) proposing modifications in Fannie Mae and Freddie Mac (the GSEs) practices for pooling loans issued as Uniform Mortgage Backed Securities (UMBS). The mREIT Council is concerned that the proposal would not prove effective and may adversely impact liquidity in both the TBA market and broader MBS markets, ultimately harming mortgage borrowers. Additionally, Nareit was a signatory on a Joint Trades Letter to the FHFA on the same topic.

Notably, the FHFA’s RFI included commentary on the important role of mREITs in the residential mortgage market and suggested that the GSEs consider reserving whole pool loans for mREIT investors. The Council, while expressing appreciation for FHFA’s recognition of the important role of mREIT investors, noted concerns about the viability of such a practice.

(Contact: Victoria Rostow at vrostow@nareit.com)

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