The regulator overseeing government-controlled mortgage finance giants Fannie Mae and Freddie Mac on Tuesday unveiled a plan for a common mortgage-backed security and asked investors if the program posed dangers to financial markets. The development of the new security is part of a program launched by the FHFA in 2012 to cut costs by replacing outdated systems at the two firms with a common infrastructure. In a formal request for public comment, the Federal Housing Finance Agency said it wanted to make sure the security's eventual adoption would improve "market liquidity while mitigating any risk of market disruption." Fannie Mae and Freddie Mac underpin the U.S. housing market by guaranteeing most new mortgages against default. They also play a crucial role in the nation's financial plumbing by buying mortgages from lenders and selling them as securitized loans to investors. Those securities currently trade separately, and a common security could increase overall trading in
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