The creation of a common securitization platform for the mortgage industry took a giant step forward on Monday with the announcement from the Federal Housing Finance Agency (FHFA) that government-sponsored enterprises Fannie Mae and Freddie Mac have formed a joint venture to build and operate the new platform.
In addition, the FHFA has filed a certificate of formation with the Secretary of State of Delaware, establishing a new company that will develop and operate the platform called Common Securitization Solutions (CSS). The limited liability company will operate as an equally owned subsidiary of Fannie Mae and Freddie Mac.
The FHFA reports that it has already leased office space for the new business in Bethesda, Md. In addition, an executive recruitment firm has been retained to identify candidates for the positions of CEO and chairman of the board of managers.
"The filing of the certificate of formation represents a significant milestone toward accomplishing the goal of building a new secondary mortgage market infrastructure," says Edward J. DeMarco, acting director of the FHFA, in a statement. "We are pleased with the progress being made and look forward to further developments."
DeMarco first announced the formation of the joint venture in March.
Terry Edwards, executive vice president and chief operating officer for Fannie Mae, says the company is ‘pleased that Common Securitization Solutions LLC has been established and that office space for this new joint venture has been secured.’
‘These are important steps toward building a more sustainable housing finance system with increased private capital participation and decreased taxpayer risk,’ he says. ‘We look forward to working with FHFA and Freddie Mac to build and operate the common securitization platform.’
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