Uniform Mortgage Backed Securities (UMBS)
Beginning June 3, 2019, Freddie Mac and Fannie Mae will each offer Uniform Mortgage Backed Securities (UMBS). Freddie Mac TBA-eligible Gold Fixed-Rate PCs will be eligible for exchange into UMBS beginning May 7 or investors can purchase newly issued UMBS beginning June 3.
UMBS are passthrough securities, each representing an undivided interest in a pool of residential mortgages. Freddie Mac offers 30-year fixed-rate UMBS in addition to 20-year, 15-year, and 10-year securities. UMBS are backed by fully amortizing mortgages and pay on a 55-day delay schedule. Freddie Mac guarantees the timely payment of interest and scheduled principal on all UMBS issued by Freddie Mac. Fannie Mae plans to offer an identical guarantee of timely payment of interest and scheduled principal on all Fannie Mae-issued UMBS. UMBS feature a payment delay of only 55 days from the time interest begins to accrue and the time the investor receives a payment.
TBA prefixes for UMBS and resecuritizations of UMBS issued by either Enterprise will align to the current prefix convention for Fannie Mae TBA-eligible securities.
|Product||UMBS and Supers Prefixes||Reverse REMIC Prefixes|
UMBS are 55-day payment delay TBA-eligible securities; if a 45-day payment delay TBA-eligible Gold PC security is exchanged for the corresponding UMBS, a one-time 10-day float compensation payment will also be paid to the investor.
This product overview is not an offer to sell or solicitation of an offer to buy any Freddie Mac securities. Offers for any given security are made only through applicable offering circulars and related supplements, which incorporate Freddie Mac’s Information Statement and related supplements.