Common Securitization Solutions (CSS) is a joint venture owned by Fannie Mae and Freddie Mac and was established to build a universal platform — or Common Securitization Platform (CSP) — for the issuance and management of mortgage-backed securities. The CSP will help Fannie Mae and Freddie Mac provide even greater liquidity to the mortgage finance industry by increasing the efficiency of the securitization process. The entire housing chain, from borrowers to investors, will benefit from what we do for our customers.
CSS has embraced the Agile approach to software development. In the Agile approach, business analysts, designers, programmers and testers all work together to share knowledge and progress. This process enables the team to incorporate greater levels of detail over time as the team learns and adapts. The Common Securitization Platform is comprised of industry standard software, systems and data requirements to make it adaptable for other market participants in the future.
Mortgage securitization is the process of packaging loans into a security to sell in the secondary market to investors like Fannie Mae and Freddie Mac. Individual mortgages with similar characteristics are grouped together into a mortgage pool to create a tradable security. These mortgage-backed securities can then be sold to third-party investors.
We’re building the Common Securitization Platform, which is intended to package securities into various structures, process them and track the payments from borrowers to investors. On November 21, 2016, Release 1 of the CSP was implemented and enabled Freddie Mac to transfer certain securities operations to CSS and the CSP.
When the CSP is fully operational, CSS will be managing $100 – $150 billion in annual issuance
volume and direct payments on
$4 trillion in securities.
The Single Security is being developed as a mortgage-backed security with common features and disclosures. The purpose of Single Security is to strengthen the U.S. mortgage market by lowering the cost of housing finance.
The CSP, which is being built by CSS, is necessary for the implementation of the Single Security. For more information on the CSP and the Single Security, click here.