Saturday, November 22, 2014

How the Govt gives Your money to slush fund.

The agreement is to treasury, Lets make sure we all see this for what it is. MONEY LAUNDERING.

define Money Laundering:
in a number of legal and regulatory systems the term money laundering has become conflated with other forms of financial crime, and sometimes used more generally to include misuse of the financial system (involving things such as securities, digital currencies, credit cards, and traditional currency), including terrorism financing, tax evasion and evading of international sanctions.

The treasury Prints money. They do not need to take Fannies money to give the slush fund more money.
The treasury could just print it. So why take fannies money? Treasury's job is to control the amount of money in the system to control inflation and counterfeiting. That is their purpose. Print and Destroy money.

so why take fannies money? The money is printed, given to the bank, the bank pays you for your employment, you pay your mortgage, the profit of that mortgage is transferred back to the Treasury and they deposit it in the slush fund. From the slush fund the Govt spends that money again. And it goes to where THEY want it to go.
GOVT decides how to spend this extra money.

What if the profits went to Fannie and Freddie? The same thing would happen but it would not enter the slush fund and would be spent on what the Corporation wanted.

The first description where the GOVT spends the money is called Socialism, or Communism.
The second where the corporation spends the money is called Capitalism.

America is the best country in the world, The richest, The most powerful, Because of Capitalistic values this nation was created on. Freedom and the american way are Foreign to our Govt.

The treasury can create money from thin air. It does not need F&F money. So who needs it? Your govt needs it and F&F are a money Laundering scheme through the use of conservatorship.  

How could F&F get new capital?

We have fannie and freddie, both profitable, both under capitalized.
How can we get from here to capitalized? Well lets say they need 100 billion each to be adequately funded.
Since the deepest of Recessions they needed $188 B it would stand to reason $200 B would be enough.

Lets say both companies become equal also. $100 B each. Since they will be competing for business it would stand to reason through CSP these two entities would be about same size and have about same amount of contracts from now on.

Lets just look at one then, Fannie Mae.

Fannie has 1.2 Billion shares out, And zero capital. Profits of about 14 billion a year. By market standards Fannie would be a market cap at P/E 12 of $168 Billion. This $140 a share with current shares.
To end all litigation, Release and Recapitalize the Treasury would have to see all Dividends collected to wipe out senior shares. Lets assume they make this concession. Fannie could Recapitalize by simply selling the Warrants for 4.6 Billion shares at $28 dollars a share.  This would raise 128 Billion in new capital for Fannie Mae. This would also give all 5.8 billion shares a value of $28 dollars.

We already Agreed that Fannie needs 100 Billion in capital to be safe. They have 28 Billion more than they needed and they can now use that 28 Billion to Pay the interest to the Junior Preferred shares.

So how does the govt gain? One: they have been paid 240B for the 188B they borrowed. Two: they have housing on safe ground. Three: they can make F&F keep the 200 Billion in Treasuries as Insurance.
$100 Billion each will stay on F&F books at all times unless there is a downturn. This money can be used to save them and then Recapitalize again From future profits just as they have done over last 6 years.

By implementing this plan,
You would have Private money support housing!
You would have the taxpayer off the hook completely in the Future!
You would have the FHFA regulating all that it wants in the mortgage industry.
You would have CSP for securitizing and Risk sharing bonds that would also be private money.
You can leave 5 Trillion dollars on F&F books and not transfer to the US national DEBT!

Mortgages would be Free again, in a Free society, run by Free men by a Free Corporation. All for Profit.
Capitalism at its finest. America is Capitalist, not Socialist. Conservatorship is Socialism.

If you look at this plan closely, Who wins? EVERYONE!  Who loses? NOBODY!
This is how I see this all playing out.

Friday, November 21, 2014

Thursday, November 20, 2014

PLS is dead and will not be revived by anyone! ever!

PLS will never exist in America again.
Two main reasons:
1. Private Loan securities need an insurer. That was AIG in past. No chance anyone wants that job again.
 No one will take on subprime, No money down, No income verified loans again. AIG got a huge haircut and was lucky to survive not only what the banks did to it before the crisis of 2008, but what the government did to it after they took it over.
2. Private Loan securities need a Platform to sell its loans. This was Bear Sterns. They went bankrupt.
In the years leading up to the failure, Bear Stearns was heavily involved in securitization and issued large amounts ofasset-backed securities, which in the case of mortgages were pioneered by Lewis Ranieri, "the father of mortgage securities".[1] As investor losses mounted in those markets in 2006 and 2007, the company actually increased its exposure, especially the mortgage-backed assets that were central to the subprime mortgage crisis. In March 2008, theFederal Reserve Bank of New York provided an emergency loan to try to avert a sudden collapse of the company. The company could not be saved, however, and was sold to JP Morgan Chase for $10 per share, a price far below its pre-crisis 52-week high of $133.20 per share

As you can see without those 2 PLS cant exist. So how does CSP by our FHFA play into this?
CSP will do the job of securitizing loans that are transfered from by players in the mortgage industry. 
At first only fannie and freddie. More than likely it will remain that way forever. But to humor everyone PLS serviced counrtywide loans and Chase and Citi loans along with many others. CSP is like the govt taking over the business of Bear sterns. This way they are in complete control of the system. With Bear Sterns they lost control and it became too late. This is the government goal. CSP which is owned and run by CSS, Fannie and Freddie will allow everyone to compete on the world stage for bond sales that will be over looked by fannie and freddie and they will be over looked by the FHFA. This eliminates number 2 from the list and gives the USA a level ground for securitization that will be monitored by the FHFA.

What about number 1? AIG? Well thats where risk sharing bonds come in and Fannie and Freddie give their expertise and efforts to sending back the bad loans from the bonds to the banks that originated them. This is also how Affordable Housing is kept in place. Fannie still takes on the loans the banks would not want to bundle up and send to CSP under their name. They transfer the 3% down and the lower Fico's to Fannie and Freddie and they keep their book clean, Provided they write them up correctly and Fannie approves them, they will become Fannies to securitize at the CSP. The other thing that Fannie and Freddie will do with the CSP is compete on the same ground for the Non bank mortgages. CSP is really not a bad idea. CSS will run it and Fannie and Freddie will be the biggest players in it. CSP will allow the 5 trillion in bonds that Fannie and Freddie have to remain with Fannie and Freddie and that will keep the National debt from growing by 30% overnight. This is a win from everyone. Fannie and Freddie will no longer exist as we know them, they will be changed and will still remain the biggest players in the mortgage market.  All the lies will become truths. 

The only thing missing is the government explicitly backing up the bonds at the CSP. This is where congress is wanted to change the rules, but not necessary. Fannie and Freddie could be the backstop with their capital since they own the CSP and CSS which operates it. The backstop could be theirs as it has been for over 70 years. Truth is Fannie and Freddie only lost money between 2005-2008 because they were taken over in September of 2008 and there was still 4 months left for the Treasury to force all the bad loans on Fannie and Freddys books. Youll notice No one gives the statistics of how much Fannie and Freddie lost from 2005-SEP2008! There are articles to backup what Im saying how the treasury forced the bad loans from the banks onto F&F immediately after Sep2008 to the tune of $20 billion each a month. In 4 months time that would have totaled $160 billion in bad bank debt pushed on the GSE books. It is not a coincidence that number is very close to the $188 billion Fannie and Freddie needed in a bailout from Treasury. Remember the $188 is with interest. So for the sake of argument lets call it $160 billion needed in bailout.

Ok back on topic, I hope this helps explain how the system is about to work and why PLS is dead forever. 

I will add some thoughts here:
Lie: Wind down fannie mae
Lie: Fannie and Freddie will no longer exist as we know them.
Lie: Shutter Fannie and Freddie
Lie: Only congress can decide the Future of housing

Truth: Wind down means remove the toxic assets from Fannies book.
Truth: Fannie will exist differently, but still be Huge players in mortgages. Still shareholder owned.
Truth: Shutter Fannie, They are closing the main building and moving to a new location.
Truth: Only congress can decide future, FHFA deals in the present only. Watts words.

Russia and Fannie Mae in 2008

Today we see three factors that influence oil prices and are working against Russia: Supply is going up with U.S. shale drilling; demand growth will likely decline if the Chinese economy continues to cool; and the dollar is getting stronger, not because the U.S. doing great but just because the rest of the world is doing worse. If oil prices continue to decline, this will expose the true state of the Russian economy.
When I visited Russia in 2008, I sensed an anti-American sentiment. NATO – which in Russia is perceived as a predominantly American entity – had expanded too close to Russian borders. Georgia tried to join NATO, but Russia put a quick end to that. Russians felt they extended a friendly hand to the U.S. after 9/11, but in response America was arraying missiles around its borders. (The U.S. says they are defensive, not offensive; Russians don't see the distinction. They are probably right.)
The true colors of this new cold war came to light recently. In August 2008, according to Henry Paulson, the U.S. Treasury secretary at the time, "top level" Russian officials approached the Chinese during the Olympics in Beijing and proposed "that together they might sell big chunks of their GSE (Fannie Mae and Freddie Mac) holdings to force the U.S. to use its emergency authorities to prop up these companies."
This incident took place just weeks before the collapse of Lehman Brothers. The U.S. economy was inches from revisiting the Stone Age. The proposed Russian-Chinese maneuver could have made such an outcome more likely. The Federal Reserve would have had to step in and buy Fannie's and Freddie's debt, and the dollar would have taken a dive, worsening the plunge in the U.S. economy. Our friend Putin wanted to bring the U.S. economy down without firing a single shot, just as he annexed Crimea from Ukraine.

Fannie Mae and Freddie Mac Litigations Detailed Summary

Fannie Mae and Freddie Mac Litigations Detailed Summary


The tide is turning, Politically and the Press.

The tide is turning. Take a look at the Google news page for Fannie mae.

https://news.google.com/news?ncl=df0Oa5LBOArdX3Mk5QIFbkxRupk2M&q=fannie+mae&lr=English&hl=en&sa=X&ei=XtxtVPScOoikyAS8wYGgCw&sqi=2&pjf=1&ved=0CC4QqgIwAQ

You'll Notice a lot of end the conservatorship talk, You'll also notice a lot of pushing by democrats for affordable housing and mortgage relief.

There is also two new leaders of the senate banking committee! Neither voted for the Johnson Crapo bill and both want to scrap it and start over, But for opposing reasons.
There will be no path forward in the next Senate.

Leaving only Watt and Lew to remove the conservatorship before the Republicans gain the presidency and Appoint a New FHFA head and a New TREASURY secretary.

It has gotten very serious for the democrats. If a Republican President were elected in 23 months, The democrats could see the affordable housing goals they strongly want to be tossed out with the closing of Fannie and Freddie by the new Republicans. In this scenario, The Republicans could do as they choose with Housing as they by law would control both FHFA and Treasury. Congress would not matter, as they do not now. HERA gives all the power needed to FHFA, under Watt the conservatorship will end!
As a contrast, under Republican FHFA affordable housing will end along with the middle class.

This can be a huge win for democrats and help them get the Presidency in 23 months. They need a strong housing finance system to win election. They need F&F to support affordability.

By the looks of it the Political will is pushing FHFA reform talk to the top of the housing agenda and with that release from conservatorship before Republicans can get control of Housing. 23 months and counting down.

FHFA_Warner_Warren_letter

Warner, Warren Letter, one day before Watt talks to Senate committee.

http://cdn1.valuewalk.com/wp-content/uploads/2014/11/FHFA_Warner_Warren_letter.pdf



To end the conservatorship,” said Johnson

  Nov 20, 2014 2:00 AM CT 
Regulators Urged to Set Fannie-Freddie Free From U.S.


http://www.bloomberg.com/news/2014-11-20/regulators-urged-to-set-fannie-freddie-free-from-u-s-.html?cmpid=yhoo

“If Congress cannot agree on a smooth, more certain path forward, I urge you, Director Watt, to engage the Treasury Department in talks to end the conservatorship,” said Johnson, who is set to retire in December.

Johnson is the first lawmaker to publicly say that regulators may have to take control of the companies’ futures. He echoes the predictions of housing analysts that there is no chance the Republican leadership taking over the Senate will reach an agreement with Democrats and PresidentBarack Obama to reform a system that guarantees affordable mortgages to most Americans. That would leave the overhaul to Watt, who has already begun to make a series of changes, from streamlining operations to transfers of mortgage-bond risk to private investors.

“If we could get Congress to do something that would pass, it would be the best solution,” said Clifford Rossi, a finance professor at the University of Maryland’s Robert H. Smith School of Business in College Park. “But it’s clear that it’s highly unlikely, particularly after the midterm elections, that we’re going to get legislation again.”

http://www.bloomberg.com/news/2014-11-20/regulators-urged-to-set-fannie-freddie-free-from-u-s-.html?cmpid=yhoo

After a $187.5 billion taxpayer bailout, Fannie Mae and Freddie Mac rebounded and are now required to send the Treasury all of their profits. They’ve paid a combined $225.5 billion

“Can the FHFA actually take action without Congress?” he said. “The answer to that is yes.”

Watt said Treasury would have to initiate talks with him if Congress isn’t able to come up with a solution. Treasury spokesman Adam Hodge said the Obama administration “continues to believe that the best way to responsibly end the conservatorship is through comprehensive housing finance reform legislation.”
“All of that can help reduce risk, but at the end of the day, if something happens --say there’s some external factor that tanks the economy -- is the government making good on these bonds or not?” she said.
Some of the strongest support for keeping Fannie Mae and Freddie Mac operating is coming from consumer advocates and civil-rights groups which see the companies as the best way to guarantee that low-income families and minorities have access to the mortgage market. Those groups helped stall the legislation winding down the two companies this year as they lobbied Democrats includingElizabeth Warren of Massachusetts and Sherrod Brown of Ohio not to support it.

Wednesday, November 19, 2014

WSJ misquotes Watt?

"It is Congress’s role to tell us what the future of GSE reform is"

I dont recall this being said as John Carney stated in HOT POTATO

I watched the entire video and so can you at the post below this one. You decide if that is what WATT said!

Seems someone likes to make up stories for his keepers?

The Quote was:
"It is Congress’s role to tell us what the future state is"

Mel also said as FHFA he "works in the here and now"

Video from Watt today at the senate.

Here is the complete Video from Watt today at the senate.

http://www.banking.senate.gov/public/index.cfm?FuseAction=Hearings.LiveStream&Hearing_id=6d6117b6-1099-4790-b7e9-3c018fcc64f5

FHFA says it wont rule out ending conservatorship.

Federal Housing Finance Agency Director Melvin Watt said Wednesday that in the “long term” he wouldn’t rule out ending the conservatorships of Fannie Mae and Freddie Mac without Congress.

http://online.wsj.com/articles/senator-calls-for-fhfa-to-end-fannie-freddie-conservatorship-1416411254

Watt and LEW will end conservatorship before two years.

Watt and LEW will end conservatorship before two years.

watt and lew put in by obama. Lew was obamas right hand man.
watt will end this conservatorship before the next presidential race.
or right after the election. I doubt it would be then, but less than 23 months and counting.
fannie is leasing a 30 year lease for its new building.
Republicans would ruin housing by having banks run it. 20% down and 3% points higher rates. almost double. This can be played for dems to be a GREAT thing for america.
Risk sharing is already in place and will be the only way they do MBS in future.
Watt said he does not care to give his opinion on future of housing, he is dealing in the here and now.
Watt also stated someone has to keep the 5 trillion in mortgages fannie and freddie now have. If its F&F, hes fine with that, or some other unknown entity. The unknowns are not winning this race.

Jacob Joseph "JackLew (born August 29, 1955) is an American government administrator and attorney who is the 76th and current United States Secretary of the Treasury, serving since 2013. He served as the 25th White House Chief of Staff from 2012 to 2013. Lew previously served as Director of the Office of Management and Budget in the Clintonand Obama Administrations, and is a member of the Democratic Party.

Melvin Luther "Mel" Watt (born August 26, 1945) is an American politician who has been Director of the Federal Housing Finance Agency since 2014. Previously he served as the United States Representative for North Carolina's 12th congressional district from 1993 to 2014. He is a member of the Democratic Party. An attorney from Charlotte, North Carolina, Watt also served one term as a state Senator and served as campaign manager for Charlotte MayorHarvey Gantt.
On May 1, 2013, President Barack Obama nominated Watt as the next head of the Federal Housing Finance Agency, which among other agencies, administers or has oversight for the FHAFannie Mae, and Freddie Mac.[1][2] The U.S. Senate confirmed Watt on December 10, 2013.[3]

Senator Calls For FHFA to End Fannie, Freddie Conservatorship

Senator Calls For FHFA to End Fannie, Freddie Conservatorship


http://online.wsj.com/articles/senator-calls-for-fhfa-to-end-fannie-freddie-conservatorship-1416411254

“Everyone agrees that conservatorship cannot continue forever, so I hope my colleagues will keep working toward a more certain future for the housing market,” Mr. Johnson said Wednesday at a Senate Banking Committee hearing. “However, if Congress cannot agree on a smooth, more certain path forward, I urge you, Director Watt, to engage the Treasury Department in talks to end the conservatorship.”

JOHNSON HOLDS FHFA OVERSIGHT HEARING

http://www.banking.senate.gov/public/index.cfm?FuseAction=Newsroom.PressReleases&ContentRecord_id=d523b5b6-0efe-7979-dff3-6e03cfd71dfa&Region_id=&Issue_id=

JOHNSON HOLDS FHFA OVERSIGHT HEARING


“Everyone agrees that conservatorship cannot continue forever, so I hope my colleagues will keep working towards a more certain future for the housing market.  However, if Congress cannot agree on a smooth, more certain path forward, I urge you, Director Watt, to engage the Treasury Department in talks to end the conservatorship. 

OMG!!!!!!!!

Johnson who is retiring, Just gave you the democrats stance on housing VS the republican stance. 


mell watt testimony to senate 11/19/2014

http://www.banking.senate.gov/public/index.cfm?FuseAction=Files.View&FileStore_id=5dc60283-09ab-437f-8484-b209c4df46a7

C. Build a new single-family securitization infrastructure for use by the Enterprises
and adaptable for use by other participants in the secondary market in the
future
FHFA’s final strategic goal is to BUILD a new infrastructure for the Enterprises’ securitization
functions. This includes ongoing work to develop the Common Securitization Platform (CSP)
infrastructure and to improve the liquidity of Enterprise securities. We have clarified that 
FHFA’s top objective for the CSP is to make sure that it works for the benefit of Fannie Mae and 
Freddie Mac. We are also requiring that the CSP leverage the systems, software and standards
used in the private sector wherever possible. This will ensure that the CSP will be adaptable for
use by other secondary market actors – including private-label securities issuers – in the future.
In addition, FHFA has also worked with the Enterprises to leverage the CSP in order to develop
a Single Security, which we believe will improve liquidity in the housing finance markets.

FHFA as Regulator:

FHFA to fulfill the following duties:
“(A) to oversee the prudential operations of each regulated entity; and
“(B) to ensure that--
(i) each regulated entity operates in a safe and sound manner, including
maintenance of adequate capital and internal controls;
(ii) the operations and activities of each regulated entity foster liquid, efficient,
competitive, and resilient national housing finance markets (including activities
relating to mortgages on housing for low- and moderate-income families
involving a reasonable economic return that may be less than the return earned on
other activities);
(iii) each regulated entity complies with this chapter and the rules, regulations,
guidelines, and orders issued under this chapter and the authorizing statutes;
(iv) each regulated entity carries out its statutory mission only through activities
that are authorized under and consistent with this chapter and the authorizing
statutes; and
(v) the activities of each regulated entity and the manner in which such regulated
entity is operated are consistent with the public interest.”
12 U.S.C. § 4513(a)(1)

FHFA as conservator:

FHFA’s authority as both conservator and regulator of the Enterprises is based upon statutory
mandates enacted by Congress, which include the following conservatorship authorities granted
by HERA:
“(D) …take such action as may be--
(i) necessary to put the regulated entity in a sound and solvent condition; and
(ii) appropriate to carry on the business of the regulated entity and preserve and
conserve the assets and property of the regulated entity.”
12 U.S.C. § 4617(b)(2)(D).

Preserve and Conserve assets and property!!!!!!!!!! Cash dividend to Treasury is ILLEGAL!!

prepare the housing finance system for the end of government conservatorship.

"Millions of creditworthy families are struggling to get mortgages and buy a home," Warren said in a comment released with the letter. "We believe FHFA can use its existing authority to extend credit to responsible families and, at the same time, prepare the housing finance system for the end of government conservatorship."

http://m.washingtonexaminer.com/senators-have-advice-for-fhfa-regulator/article/2556350

Two Democrats are calling on the regulator who oversees Fannie Mae and Freddie Mac to bring private capital into the housing finance system and boost credit through the two bailed-out mortgage businesses.
Senators Elizabeth Warren, D-Mass., and Mark Warner, D-Va., 
wrote a letter to Federal Housing Finance Agency Director Mel Watt 

Tuesday, November 18, 2014

CSS, what is it?

http://www.fhfa.gov/AboutUs/Reports/ReportDocuments/2014Scorecard051314FINAL.pdf

2014 scorecard FHFA!
Build a new single-family securitization infrastructure for use by the Enterprises and
adaptable for use by other participants in the secondary market in the future. [30%] finished
The Enterprises are to:
Continue working with FHFA, each other and Common Securitization Solutions, LLC to build and test the Common
Securitization Platform (CSP) and continue the implementation of required changes to the Enterprises’ related
systems and operations for integration into the CSP. The Enterprises’ work on CSP should incorporate the
following design principles:
 Focus on the functions necessary for current Enterprise single family securitization activities;
 Include the development of the operational and system capabilities necessary to issue a single
(common) security for the Enterprises; and
 Allow the option for the integration of additional market participants in a future system.
Identify key components, features and standards needed for a single (common) security in the CSP. Assess key
issues and begin to address these issues:
 Continue to explore other shorter-term changes that may improve market liquidity in the Agency MBS
market.

2014 Scorecard for the Common Securitization Solutions, LLC (CSS)
 Continue to build and test the Common Securitization Platform (CSP)
 CSS should focus its work with the Enterprises on the functions necessary for current Enterprise
securitization activities.
 This work should include the operational and system capabilities needed to issue a single (common)
security for the Enterprises.
 In addition, this work should allow for the option and the integration of additional market participants
in a future system.
 Complete and submit an updated plan for integrating with the Enterprises.
 Develop the CSS multi-year business and operational plan, including a budget.
 Work with the Enterprises to obtain and utilize industry input.
 Provide input to FHFA for periodic progress reports to the public.

http://www.fanniemae.com/portal/about-us/media/corporate-news/2014/6187.html

WASHINGTON, DC – Fannie Mae (FNMA/OTC) and Freddie Mac (OTCQB: FMCC) today jointly announced that the first chief executive officer (CEO) has been named for Common Securitization Solutions, LLC (CSS), which was established by the companies to build and operate the Common Securitization Platform (CSP), a new secondary mortgage market infrastructure. Additionally, Fannie Mae and Freddie Mac each appointed two executives to the CSS Board of Managers and signed governance and operating agreements for CSS.

Common Securitization Solutions, LLC is a jointly owned limited liability company formed between Fannie Mae and Freddie Mac for the purpose of designing, developing, building and operating the CSP. Common Securitization Solutions is equally owned by Fannie Mae and Freddie Mac and represents an important milestone in FHFA’s goal of building a new secondary market infrastructure. The intention of the CSP is to replace certain elements of the Fannie Mae and Freddie Mac proprietary systems for securitizing mortgages and performing associated back-office and administrative functions. 

http://fhfaoig.gov/Content/Files/EVL-2014-008.pdf

As of December 31, 2013, the Enterprises had spent approximately $65 million 

on the CSP’s development.
In 2012, the Federal Housing Finance Agency (FHFA or Agency) concluded 
that the back office systems by which the Enterprises securitize mortgages 
were outmoded and in need of being immediately upgraded and maintained.
Subsequently, FHFA, as conservator, directed the Enterprises to build the
Common Securitization Platform (CSP or Platform) to replace some parts of 

the Enterprises’ back office systems.
Under FHFA’s oversight, the Enterprises have made some progress in 
developing the CSP. An FHFA official told us that, as of March 2014, roughly
half of the necessary software development had been completed. According to 

FHFA, a consultant hired by the Enterprises found the CSP is well-designed. 

FHFA has also established an independent corporate entity, Common 
Securitization Solutions, LLC (CSS), that will develop, build, own, and 

operate the CSP. However, CSS, which is jointly owned by the Enterprises

The five functions discussed below are currently performed 
by the Enterprises’ back office systems and largely 

the focus of the CSP:

 Data Acceptance – Data acceptance is the process by which the Enterprises validate 6
loan level data associated with mortgages they pool and plan to securitize. For 
example, the Enterprises confirm that zip codes of the mortgaged properties are 
expressed in the correct format, i.e., in nine numbers. The Enterprises also confirm 
that the underlying mortgages conform to certain of the Enterprises’ MBS rules.7
 For 
example, with a 30-year fixed-rate security, the Enterprise will verify that all of the 
loans in the underlying pool contain the appropriate characteristics.
 Issuance Support – Issuance is the process of offering MBS to investors. To initiate
this process, the Enterprises transmit to the Federal Reserve Bank of New York basic 
facts about the security, the prospectus, and their initial disclosures. The Enterprises
publish initial disclosure information simultaneous to the security issuance.
 Disclosures – Disclosure is the process by 
which the Enterprises publish statements 
for their MBS investors that describe the 
securities issued and the characteristics of 
the underlying mortgage pools. The 
Enterprises publish disclosures using 
monthly data provided by servicers.
 Master Servicing Operations – The Enterprises serve as master servicers for the MBS 
they issue. Master servicing functions include the collection and reconciliation of loan 
data reported by the servicers. For example, the Enterprises compare their own 
calculations of expected monthly principal and interest payments with the amounts 
reported to them by servicers each month.
 Bond Administration – Bond administration is the process by which the Enterprises 
ensure that payments associated with their MBS are calculated and distributed 
appropriately. Bond administration includes calculating the monthly principal and 
interest payments for MBS. As part of this function, the Enterprises generate MBS 

performance metrics that are included in their monthly MBS disclosures.

Over time, FHFA has articulated a number of goals for the CSP, including: 
 Replacing elements of the Enterprises’ outmoded back office systems;
 Conserving taxpayer dollars by investing once (CSP) and using twice (by both 
Enterprises); 
 Providing a common and flexible platform capable of accommodating various 
securitization structures, including risk-sharing structures that may not be compatible 
with the Enterprises’ infrastructures;
Supporting other market participants, for example, issuers of private-label MBS
(PLMBS)19; 
 Facilitating policy changes, emerging standards, new technologies, and regulatory 
reforms;

CSS seems to be a way to revive the PLS market under the disguise of FHFA control and Fannie and Freddie oversight!!  

Further, FHFA expects the CSP to yield a net benefit to taxpayers. Specifically, FHFA 
anticipates that the development of the CSP, and the potential replacement of elements of the 
Enterprises’ proprietary infrastructures, will conserve taxpayer funds. Indeed, FHFA stated 
that the CSP “will be one way American taxpayers realize a return on their substantial 
investment in the Enterprises while also making it possible to retire the Enterprises’ 
proprietary systems…

Not retire the ENTERPRISES!

The CSP Will Not Fully Replace the Enterprises’ Back Office Securitization Systems
According to FHFA, when it is built, the CSP will be a separate IT system composed of five 
modules that will perform some of the Enterprises’ back office securitization functions 
described above more flexibly and efficiently.23
 That is, the CSP will enable the Enterprises 
to add functionality without having to rely on expensive manual changes, particularly at 
Fannie Mae. If executed as intended, the CSP could permit the Enterprises to reduce 
alteration and maintenance costs, test a specific module without affecting other modules,
accommodate new products, and create accessibility for other market participants.

While the CSP is intended to produce these benefits, it will not replace the Enterprises’ 
current back office systems entirely. The Enterprises will have to continue to maintain and 
use some of their existing systems for the following three reasons:
First, it appears that certain existing single-family securitizations may not be 
transferred to the CSP because of the complexity of designing a system capable of 
servicing both past and future products. 
 Second, the CSP will only support single-family securitization. The Enterprises will 
continue to use their existing systems for multifamily mortgage securitizations. There 
are no plans for the CSP to accommodate multifamily mortgage securitizations.
 Third, the Enterprises have some back office systems that will not be part of the CSP. 
For example, the CSP will not support master servicing functions for non-performing 
loans. Those duties will remain with the Enterprises.

 From the Demarco days:


The two government-sponsored enterprises have created a joint venture — Common Securitization Solutions, LLC — and signed a lease for 63,000 square feet of office space at 7501 Wisconsin Ave., according to the Federal Housing Finance Agency, the regulator and conservator of Fannie and Freddie.
The firm is expected to move in by January and eventually ramp up to between 200 and 250 employees, said Corinne Russell, an FHFA spokeswoman.
He announced plans for the new mortgage-backed securities firm in March, but its exact structure and function remain unsettled while Congress and the Obama administration deliberate on what will succeed Fannie and Freddie. Despite the housing recovery, the two enterprises continue to dominate the secondary market for single-family and multi-family mortgages.
“The overarching goal is to create something of value that could either be sold or used by policy makers as a foundational element of the mortgage market of the future,” DeMarco said in March.
Bethesda was chosen for the CCS headquarters to give it a physical presence separate from its corporate parents. Although Fannie and Freddie will own CCS initially, in the long term, it will be designed to be a key block in building a new secondary mortgage market infrastructure.
"The filing of the Certificate of Formation represents a significant milestone toward accomplishing the goal of building a new secondary mortgage market infrastructure," FHFA's Acting Director Edward J. DeMarco said.  "We are pleased with the progress being made and look forward to further developments."
The new company also has a likely new home.  FHFA said that authorized officials from both Fannie Mae and Freddie Mac had signed a three-year lease for office space in Bethesda, Maryland.
In a further indication that the new common platform may soon be up and running, the GSEs have employed an executive recruitment firm which has already begun identifying and interviewing candidates for key positions at CSS.  These include a chief executive officer and Chairman of the Board of Managers.


THIS IS not what Watt is saying less than a year later!!!!!!!!!!!! We know the positions were filled by Fannie and Freddie.
===========================================

So lets bottom line it.

it will not replace the Enterprises’ current back office systems entirely. 

The Enterprises will have to continue to maintain and use some of their existing systems for the following three reasons:

 First, it appears that certain existing single-family securitizations may not be 
transferred to the CSP because of the complexity of designing a system capable of 
servicing both past and future products. 

 Second, the CSP will only support single-family securitization. The Enterprises will 
continue to use their existing systems for multifamily mortgage securitizations. There 
are no plans for the CSP to accommodate multifamily mortgage securitizations.

 Third, the Enterprises have some back office systems that will not be part of the CSP. 
For example, the CSP will not support master servicing functions for non-performing 
loans. Those duties will remain with the Enterprises.

Federal Housing Finance Agency 
Office of Inspector General
http://fhfaoig.gov/Content/Files/EVL-2014-008.pdf

So the 5 trillion in loans single family will remain with F&F
the multifamily will remain with F&F
CSP will not support master servicing. F&F will, along with non performing.

CSS,CSP seems to be a way to revive the PLS market under the disguise of FHFA control and Fannie and Freddie oversight!!
I think it is interesting Warner and Warren are pushing for more openness from watt on CSP and its accounting.
But be sure, CSS is CSP. CSS will run CSP.
FHFA has also established an independent corporate entity, Common
Securitization Solutions, LLC (CSS), that will develop, build, own, and
operate the CSP. However, CSS, which is jointly owned by the Enterprises
NOTICE the word OWN!
Fannie Mae (FNMA/OTC) and Freddie Mac (OTCQB: FMCC) today jointly announced that the first chief executive officer (CEO) has been named for Common Securitization Solutions, LLC (CSS), which was established by the companies to build and operate the Common Securitization Platform (CSP), a new secondary mortgage market infrastructure. Additionally, Fannie Mae and Freddie Mac each appointed two executives to the CSS Board of Managers and signed governance and operating agreements for CSS.
NOTICE the CEO was picked by F&F, Not as Demarco was going to have it picked by a recruiting firm. Watt is making the future of PLS with F&F as the captains of the NEW ship.
using CSP, conservatorship can end. according to 2014 FHFA report in august CSP is 30% achieved.

It begs the question then if CSP is owned by CSS and that is owned by F&F, and if multifamily and legacy will remain with F&F, then how would you close F&F?

LOL the answer is you cant and you wont! When CSP is finished, 30% done now according to FHFA,  conservatorship will end by Watts stroke of the Pen.

Also would the dems dare give up all their work over the last 6 years on this over to a new FHFA regulator in 2 years? Knowing the NUKE option for a new director was used and now only 50% republicans needed to put the new presidents nominee in place of Watt? Obama is not popular and neither are the dems as of last election.
What about if they ruin housing with Republican give it to the banks bill? Johnson CRAP-o garbage. NO chance of this. NONE. Zero. Release is coming.
PLS will be run by F&F through CSS using CSP. 



from timhoward717, TY Link


Initial Cost of Bailout to Taxpayers
FSLIC 1989 $124 Billion
GSE 2008 $187 Billion
Time Before Taxpayers were Repaid
FSLIC 1989 Never
GSE 2008 4 Years
Final Cost to Taxpayer
FSLIC 1989 Over 1/2 Trillion including interest on bonds issued to finance bailout
GSE 2008 $0 In fact the taxpayers have been repaid with interest.
Which system works better to protect the taxpayers? The numbers tell the story.
The GSE system offers more protection to taxpayers than a Federal Insurance Program.
MY TAKE:
Savings and loans vs GSE bailouts
its pretty obvious which worked better. 
After 4 years GSE's are strong and working Great!
After 4 years FSLIC was dead and NO supportive system moving forward other than the GSE's. When the Savings and Loans went belly up FANNIE AND FREDDIE stepped in to save the mortgage market then too. 

How the $187 Billion GSE 'Bailout' Went Awry

How the $187 Billion GSE 'Bailout' Went Awry


http://www.nationalmortgagenews.com/news/commentary/how-the-187-billion-gse-bailout-went-awry-1043151-1.html?zkPrintable=1&nopagination=1




New leaders in Senate Banking committee

http://freebeacon.com/issues/despite-midterms-republicans-stymied-on-fannie-and-freddie/

New leaders in Senate Banking committee:

Sen. Richard Shelby (R., Ala.) is poised tobecome chairman of the Senate Banking, Housing, and Urban Affairs Committee 
Shelby opposed the Senate housing bill earlier this year because he thought it still preserved too much government interference in the market. Sen. Sherrod Brown (D., Ohio), who will be the ranking Democrat on the committee, voted against it for the opposite reason—that it did not do enough to promote affordable housing.

Any legislation that winds down Fannie and Freddie could stall on the Senate floor, or face a veto from President Barack Obama, experts said on Thursday at the American Enterprise Institute (AEI).
A previous Senate bill that aimed to gradually remove Fannie and Freddie from the mortgage market failed to receive a floor vote this year. Critics said it would have made the system less stable by empowering a few large bank lenders and again leaving taxpayers on the hook if the mortgages default.

No chance of corker warner crapo johnson. DOA bill. NEXT......