FHFA's 2014 Strategic Plan for the Conservatorships of Fannie Mae and Freddie Mac includes the goal of improving the overall liquidity of Fannie Mae's and Freddie Mac's (the Enterprises) securities through the development of a common mortgage-backed security. That security is the Uniform Mortgage-Backed Security or UMBS, which began trading in the “To-Be-Announced" (TBA) market on March 12, 2019. UMBS issued by Fannie Mae and Freddie Mac trade in the TBA market without regard to which Enterprise is the issuer. This fungibility, or interchangeability, is central to broadening and enhancing the liquidity of the secondary mortgage market on an ongoing basis.
Consistency of prepayment rates is important to the success of UMBS and to the efficiency and liquidity of the secondary mortgage market. Some industry stakeholders have expressed concern that the rates of prepayment of the Enterprises' securities might materially diverge and undermine their fungibility. FHFA has taken a number of steps to promote the continued consistency of prepayment rates of Fannie Mae- and Freddie Mac-issued mortgage-backed securities (MBS). This quarterly report is part of that commitment and provides market participants additional transparency into the data FHFA receives and reviews on a monthly basis and into FHFA's uses of that data.