Fannie and Freddie Continue Moving Toward Common Security

Another milestone was reached on Wednesday as the government sponsored enterprises (GSEs) and their conservator the Federal Housing Finance Agency move toward creation of a Common Securitization Platform (CSP).  Fannie Mae and Freddie Mac announced the creation and composition of an Industry Advisory Group.  This entity is intended to provide feedback to Common Securitization Solutions, LLC (CSS), the corporation jointly formed by the GSEs to develop and manage the platform and development of a single mortgage-backed security for loans guaranteed by both GSEs.

The CSP and new single security are among FHFA's principal strategic goals for the GSE conservatorship. The CSP will perform many of the core back office operations for the single security, as well as most of the GSEs' current securitization functions for single-family mortgages. The CSP is necessary for the implementation of the single security which will be issued by the GSEs to finance fixed-rate mortgage loans backed by one- to four-unit single-family properties.

The advisory group will be composed of representatives of major stakeholders in the housing finance industry.  One consumer rights organization will also sit on the panel.  In addition to Freddie Mac, Fannie Mae and CSS, participants in the Industry Advisory Group will come from:

• The Center for Responsible Lending
• Financial Services Roundtable
• Fixed Income Clearing Corporation
• Mortgage Bankers Association
• Independent Community Bankers Association
• American Bankers Association
• Securities Industry and Financial Markets Association
• Structured Finance Industry Group