Fannie and Freddie Helping Secondary Market with LIBOR Transition


Fannie Mae and Freddie Mac have debuted new websites that provide resources for lenders and investors as the GSEs transition away from the London Interbank Offered Rate (LIBOR).

LIBOR is expected to stop being published at the end of 2021.

The enterprises’ websites contain information about resources and products, including the GSEs’ jointly published LIBOR Transition Playbook and Frequently Asked Questions (FAQ).

“To protect our nation’s housing finance markets, FHFA has directed the entities we regulate to transition away from LIBOR,” says Federal Housing Finance Agency Director Mark Calabria. “These resources will help market participants to likewise move away from LIBOR in a safe and sound manner.”

Available on Fannie Mae and Freddie Mac webpages, the Playbook describes key transition milestones and recommended actions for stakeholders to consider as they manage the upcoming transition. Together with the accompanying FAQs, these tools will help participants plan and adapt business policies, procedures and processes to support products linked to alternative reference rates, discontinue most LIBOR-indexed products by the end of 2020, and prepare for discontinuing the use of LIBOR as an index.

The enterprises also announced updates related to transitioning their Credit Risk Transfer (CRT) programs and their collateralized mortgage obligations (CMOs), including the cessation dates for new issuances indexed to LIBOR and the expected dates for new issuances indexed to the Secured Overnight Financing Rate (SOFR). Details of these important milestones are available on the Enterprises’ LIBOR Transition webpages, found here and here.

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