On Wednesday, February 5, the Federal Housing Finance Agency (FHFA) announced that Fannie Mae and Freddie Mac are taking new steps to ease the transition from LIBOR to SOFR. These steps include: requiring new language for Uniform Adjustable Rate Mortgage (ARM) instruments closed on or after June 1, requiring LIBOR based single-family and multifamily ARMs to have a loan application date of September 30th or earlier to be eligible for acquisition, and ceasing acquisitions of single-family and multifamily LIBOR ARMs on or before December 31st. “These steps represent important milestones in the Enterprises’ transition away from LIBOR to a more robust reference rate. We will continue to monitor exposure to LIBOR and ensure the Enterprises manage the risks associated with the transition in a safe and sound manner,” said FHFA Director Mark Calabria.
Read more via the Federal Housing Finance Agency.