WASHINGTON, DC—And so it begins. On Tuesday the Federal Housing Finance Agency announced it was seeking input on the structure of a proposed single security encompassing holdings from both Fannie Mae and Freddie Mac. This would be the first step in a multi-year process to reform the GSEs, it said. Having a single security, instead of the current situation in which each GSE issues its own securities, would also boost liquidity for housing financing.

The proposed single security would leverage the GSEs’ existing security structures and encompass many of the pooling features of the current Fannie Mae Mortgage Backed Security and most of the disclosure framework of the current Freddie Mac Participation Certificate, the FHFA said.

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