A common securitization platform is under "full scale development" and should be ready for "significant testing" by next year, spokesmen for the government-sponsored housing enterprises said at a mortgage industry conference in New York.
Timothy Yanoti of Fannie Mae told the Mortgage Bankers Association's Secondary Market Conference that the new securitization platform "relies heavily" on standard industry products, but "does not incorporate legacy programs, nor do we expect it to."
Mark Hanson, Yanoti's counterpart at Freddie Mac, told the special Sunday afternoon opening session that in building the platform, the two companies are attempting to "strike the right balance" between standards and competition.
Under the guidance of their regulator and conservator, the Federal Housing Finance Agency, the GSEs "have made a lot progress on numerous facets," said Hanson, senior vice president of Freddie Mac's Securitization Division.
The FHFA's Manoj Singh said creating the platform "has been a very interactive process in close consultation" with his agency and mortgage business interests. "We've tried to incorporate as many [industry comments] as possible," he said.
But the three speakers stressed that the process is far from complete, and that industry input is still welcome. "Your feedback is very important," said Yanoti.
It's "still an interactive process," said Singh, associate director in the FHFA's Office of Strategic Initiatives.
The FHFA executive also vowed that the new common securitization platform, or CSP, as it will forever be known, will not be proprietary. "It will be open to everybody," he said.
Yanoti said the platform will basically be a "back-office function," one that will be an automated process that will move millions of loans a year. He said that the cost of using the platform will be only a nominal part of making the loan, and that the agencies will compete on pricing.