WASHINGTON (11/5/14)--A new secondary mortgage market infrastructure, Common Securitization Solutions (CSS), has been created by Fannie Mae and Freddie Mac to operate a new platform to deal a single mortgage-backed security.
The Federal Housing Finance Agency proposed the single security in August in order to meet a goal in this year's strategic plan to develop the single security. The single security would be mutually interchangeable with legacy Fannie Mae and Freddie Mac mortgage-backed securities.
Fannie and Freddie will serve as joint owners of CSS, which will design, develop, build and operate a common security platform (CSP) that will serve as the seller of the single security. The intention of the CSP is to replace certain elements of the Fannie Mae and Freddie Mac proprietary systems for securitizing mortgages and performing associated back-office and administrative functions, according to a statement from Fannie Mae.
FHFA Director Mel Watt said the goal is for the agency to build a new securitization infrastructure that would "meet the current securitization needs of the enterprises that could be adaptable for other users in the future."
Fannie and Freddie have announced that David Applegate will serve as CEO of CSS. Applegate previously served as president/CEO of Homeward Residential Inc., a Dallas-based mortgage lender and servicer. He also served as president of GMAC Mortgage and chair of GMAC Bank from 2000 to 2007.
"David has the skills and experience needed at this important juncture in the development of the CSP to move it to launch," Watt said.
Four individuals have also been named to the CSS board of managers, two each from Fannie and Freddie. They are: