FHFA Releases “An Update on the Common Securitization Platform”

On September 15, 2015 the Federal Housing Finance Agency released an update on the Common Securitization Platform (CSP).  The report can be found at FHFA’s Common Securitization Platform website.  Some of the highlights of the FHFA update are:
  • Common Securitization Solutions, LLC (CSS) was established in October 2013 as an independent, jointly-owned business entity by Fannie Mae and Freddie Mac. (pg. 6)
  • From 2012 through mid-2015, the Enterprises had invested $146 million in CSS (pg. 2)
  •  In July 2015, CSS, Freddie Mac and Fannie Mae convened a Single Security/CSP Industry Advisory Group (pg. 19)
  • All CSS employees are currently employees of either Fannie Mae or Freddie Mac.  CSS plans to convert its associates to CSS employees in the first half of 2016 (pg.2)
The Common Securitization Platform (CSP) has five modules including:
  1.  Data Acceptance
  2.  Issuance Support
  3. Master Servicing Operations
  4. Bond Administration
  5. Disclosure
CSS and the Enterprises are now preparing for two releases of CSP software (Release 1 and Release 2) which will start with Freddie Mac using Release 1 for Data Acceptance, Issuance Support, and Bond Administration modules to perform activities related to its current single-class fixed rate securities.  FHFA will announce a start date for Freddie’s use of Release 1 in 2016 (pg. 3).  This initial release will require the CSP to support data processing for approximately nine million mortgages, 500,00 pools and 250,000 securities.  Testing for Release 1 is underway using live data from the Enterprises (pg. 17). CSP software Release 2  will allow both Enterprises to use the Data Acceptance , Issuance Support, Disclosure and Bond Administration modules to perform activities related to their current fixed rate securities (both single-class and multi-class); to issue Single Securities, including co-mingled re-securitizations.  Release 2 will also allow Fannie Mae to use the CSP to issue and administer mortgage securities back by ARMS (pg. 3). Prior to issuance of Single Securities, the Enterprises will make public the file formats and other technical specification related to Single Security disclosures (pg. 19). For more information or discussion, reach out to us: Patty Phillips, Managing Director (pphillips@riskspan.com) Pat Greene, Senior Managing Director (pgreene@riskspan.com) Brad Davis, Senior Managing Director (bdavis@riskspan.com)