The Mortgage Bankers Association (MBA) has released a concept paper, The Central Securitization Platform: Direction, Scope, and Governance. This concept paper calls on the Federal Housing Finance Agency (FHFA) to establish a formal, transparent process which allows stakeholders the ability to directly communicate to the FHFA comments or concerns regarding the creation of the common securitization platform.
This is the fifth piece of MBA’s five-part plan, "Key Steps on the Road to GSE Reform," (The Central Securitization Platform: Direction, Scope and Governance) which recommends immediate steps the FHFA and the government-sponsored enterprises (GSEs)—Fannie Mae and Freddie Mac—can take to ease the transition to a new secondary mortgage market regime.
“Because this platform is just one piece of a much larger puzzle that impacts borrowers, lenders and the market as a whole, FHFA should create an advisory board made up of industry representatives with the authority to direct the scope and immediate priorities of the platform’s development,” said Debra W. Still, CMB, MBA’s chairman. “We believe that this panel should be created before any other further development is undertaken.”
MBA believes the key components of the platform creation should focus primarily on:
►Accommodating the needs of today’s agency market;
►Allowing private issuers the option to access the Platform in a later development stage;
►Utilizing existing industry standards;
►Establishing a strong panel of industry representatives to guide the development of the Platform;
►Realizing significant savings for taxpayers through the consolidation of Fannie Mae and Freddie Mac back office personnel and systems; and
►Facilitating the delivery of small lots (as few as single loans) into multi-lender pools.
“The steps in our plan continue moving the market in a positive direction toward a broad, competitive real estate finance system of the future," said David H. Stevens, president of the MBA. "Each one of these steps advances necessary reforms to the secondary mortgage market in a manner consistent with the common objectives shared by the majority of end state proposals. It requires no Congressional action and needs to begin right now.”