FHFA Delays Release 2 of Common Securitization Platform to 2Q 2019
The Federal Housing Finance Agency yesterday delayed until second quarter 2019 for Release 2 of its Common Securitization Platform for Fannie Mae and Freddie Mac.
FHFA published An Update on Implementation of the Single Security and the Common Securitization Platform (https://www.fhfa.gov/AboutUs/Reports/ReportDocuments/Update-on-Implementation-of-the-Single-Security-and-CSP_March-2017.pdf). Release 2 will allow Fannie Mae and Freddie Mac to use the CSP to issue a single, common security to be called the Uniform Mortgage-Backed Security, or UMBS. Release 2 had originally been targeted for 2018.
The Update also details implementation of Release 1 by Freddie Mac and Common Securitization Solutions, a joint venture owned by Fannie Mae and Freddie Mac, in November. With Release 1, Freddie Mac is now using the Data Acceptance, Issuance Support, and Bond Administration modules of the CSP for activities related to its current single-class, fixed-rate securities Participation Certificates and Giant PCs. With Release 2, both Fannie Mae and Freddie Mac will use the modules and issue UMBS.
“I encourage all market participants to begin moving forward with their preparations to make the changes they will need to accompany implementation of the Single Security Initiative,” said FHFA Director Mel Watt.
The Mortgage Bankers Association has called for faster implementation of the Common Securitization Platform and the single security to ensure that these advances cannot be reversed. Additionally, the MBA said the platform should be open to non-agency mortgage-backed securities so that long-term efforts for both private capital and GSE reform can take advantage of the benefits of its efficiency, data and consistency. MBA has also called for the CSP, and CSS itself, to be truly independent.
The FHFA Update also describes other milestones reached, costs related to the CSP and specific steps being taken to ensure alignment between Fannie Mae and Freddie Mac, which FHFA said is central to the success of the Single Security and to enhancing the liquidity of the secondary mortgage market on an ongoing basis.
