Fannie Mae to Use ARRC Recommended Fallback Language for Single-Family ARMs
Fannie Mae supports the Alternative Reference Rate Committee’s (ARRC) recommendation to replace the London Interbank Offered Rate (LIBOR) with a new index based on the Secured Overnight Financing Rate (SOFR) to ensure a seamless transition away from LIBOR by the end of 2021. As part of this transition, we intend to use the fallback language that the ARRC has recommended for newly-originated adjustable-rate mortgages (ARMs). We anticipate publishing in the first quarter of 2020 updates to our uniform ARM notes to incorporate the recommended fallback language for all newly-originated ARMs. Fannie Mae will work closely with the ARRC, the Federal Housing Finance Agency, Freddie Mac, and other industry participants throughout the transition away from LIBOR.
For more information, please read the ARRC news release.
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