Fannie Mae and Freddie Mac recently provided additional details of the necessary changes to outstanding adjustable-rate mortgage loans that currently are linked to LIBOR indices. As expected, these changes largely mirror the changes mandated in the recently enacted Adjustable Interest Rate (LIBOR) Act (“LIBOR Act”), as well as current practice for new Fannie Mae and Freddie Mac loans. On the heels of the adoption of the Regulation Implementing the Adjustable Interest Rate (LIBOR) Act, Fannie Mae and Freddie Mac, on December 22, 2022, announced their choice of SOFR-linked benchmark replacements for existing “legacy” LIBOR-linked mortgage loans for which they are the “determining person,” as defined in the LIBOR Act.
Read the full article at Mayer Brown’s Consumer Financial Services Review blog.