GSEs Establish Advisory Group To Provide Feedback On New Single Security

Posted by Patrick Barnard on July 08, 2015 No Comments
Categories : Residential Mortgage

Government-sponsored enterprises (GSEs) Freddie Mac and Fannie Mae have jointly established an industry advisory group to provide feedback and share information on efforts to build a common securitization platform and implement a new single security.

The new platform is being built by Common Securitization Solutions (CSS), a technology start-up that was established by the GSEs last year.

In addition to Freddie Mac, Fannie Mae and CSS, the advisory group will include a broad cross-section of industry organizations, including 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, and Structured Finance Industry Group.

The single security is a joint initiative of Fannie Mae and Freddie Mac, under the direction of the Federal Housing Finance Agency, to develop a single mortgage-backed security (MBS). To make it happen, a new technology platform is being developed by CSS that will perform many of the core back-office operations for the single security, as well as most of the GSEs' current securitization functions.

To achieve this, the GSEs will align key components of Fannie Mae's MBS and Freddie Mac's participation certificates with an aim of bringing additional liquidity and fungibility to the To Be Announced (TBA) market and to reduce or eliminate the trading disparities that exist today between the GSEs' TBA securities.

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