Fannie Mae-No Politics (FNMA)

[navycmdr]

Being Diluted: GSE Control of the CSS

Thurs Mar 11, 2021 - [e-mail]



It appears that Fannie Mae and Freddie Mac may have lost corporate control of Common Securitization Solutions, the limited liability corporation that issues and manages uniform mortgage-backed securities for the two government-sponsored enterprises.

Founded in 2013 at the direction of the Federal Housing Finance Agency, the Bethesda-based CSS is jointly owned and operated (and financed) by Fannie and Freddie. Until recently, the company’s six-person board of managers was dominated by the four GSE-appointed directors, two from each mortgage giant.

That all changed early this year, when the FHFA, acting in its capacity as conservator for the enterprises, appointed two new independent directors to the CSS board. That was in addition to three existing FHFA-appointed board members. As a result, the four board members appointed by Fannie and Freddie are now outnumbered by the five named by the FHFA.

A big deal ? As Fannie explained in its latest 2020 10-K, this new majority will have the final say “on any matter during conservatorship, and on a number of significant matters following either our or Freddie Mac’s exit from conservatorship.”