Fannie Mae [1] and Freddie Mac [2] jointly announced [3] that David M. Applegate will be the first CEO of Common Securitization Solutions (CSS), which was created by the GSEs to operate a new secondary mortgage market infrastructure, Common Securitization Platform (CSP).
In addition to naming the new CEO, both GSEs appointed two executives to the CSS Board of Managers. The two companies also signed governance and operating agreements for CSS.
Applegate has more than 20 years of mortgage banking experience, having previously been an executive with GMAC Mortgage and GMAC Bank during his 17-year tenure with General Motors Acceptance Corporation. While with GMAC Mortgage, Applegate assembled an executive team that helped transform the company into an industry leader.
Immediately prior to coming to CSS, Applegate was the president, CEO, and director of Dallas mortgage servicer and lender Homeward Residential, Inc., a worldwide company with assets of $4.5 billion and a workforce of 3,000. He has also managed a financial consulting practice and served as president of Radian Guaranty, Inc., a mortgage insurer.
"I am delighted that CSS will have a leader of such stature and quality. David Applegate will help ensure that CSS forms a sound foundation on which to rebuild the infrastructure of the country's secondary mortgage market and launch a single security," said Jerry Weiss, Freddie Mac EVP and chief administrative officer. "Freddie Mac is pleased to be playing a leading role in this important project."
CSS was created for the purpose of operating the CSP and is jointly owned by Fannie Mae and Freddie Mac. Considered to be a milestone in the Federal Housing Finance Agency's (FHFA [4]) goal of building a new secondary market infrastructure, CSP's purpose is to replace certain elements of the GSE's proprietary system with regards to securitizing mortgages and performing back-office and administrative functions. FHFA Director Mel Watt said in a speech earlier this year that the development of the CSP is one of the most important goals for the GSEs going forward.
"CSS is poised to take the next steps in building a future securitization infrastructure," said Andrew Bon Salle, Fannie Mae EVP of Single-Family Underwriting, Pricing and Capital Markets. "David Applegate is a respected leader in the industry who will bring deep expertise in mortgage finance to CSS. Fannie Mae looks forward to working with CSS, Freddie Mac and the Federal Housing Finance Agency to lay the foundation for a strong housing finance system for the future."
The four new members of the CSS Board of Managers are: David Lowman, Freddie Mac's EVP of single-family business; Jerry Weiss, Freddie Mac's EVP and chief administrative officer; Terry Edwards, Fannie Mae's VP and COO; and Rick Sorkin, Fannie Mae's SVP of single-family pricing strategy and structured transactions.
"Today, Fannie Mae and Freddie Mac (the Enterprises) announced several important steps in the multiyear process of developing the Common Securitization Platform, which will create a shared securitization infrastructure for both Enterprises," FHFA Director Mel Watt said in a prepared statement. "As detailed in our 2014 Strategic Plan for the Conservatorships [5], one of our goals is to build a new securitization infrastructure to meet the current securitization needs of the Enterprises that could be adaptable for other users in the future. The Enterprises announced David Applegate as Chief Executive Officer for Common Securitization Solutions, LLC. David has the skills and experience needed at this important juncture in the development of the CSP to move it to launch.
"Fannie Mae and Freddie Mac, which jointly own CSS, also announced a revised governance structure and operating agreements. The new Board of Managers structure—with two representatives from each company—enhances the ability to support the Enterprises' securitization functions. FHFA remains committed to achieving a seamless CSP launch, and I am confident the steps announced today, combined with ongoing input from stakeholders, will help ensure success."