Fannie Mae and Freddie Mac filed paperwork Monday to merge the two companies' securitization platforms into a single unit, according to the Federal Housing Finance Agency.
The mortgage giants filed a certificate of formation with the Secretary of State of Delaware to create a new entity called Common Securitization Solutions LLC. The joint venture will be an equally-owned subsidiary of Fannie and Freddie.
The filing is a "significant milestone toward accomplishing the goal of building a new secondary mortgage market infrastructure," said Edward DeMarco, the FHFA's acting director.
In March, DeMarco announced plans to establish a new joint business entity when he delivered a status update on the FHFA's work. At the time, DeMarco said the joint organization would essentially combine the government-sponsored enterprises' back-office activity into one entity that will issue securities, provide disclosures, pay investors and disseminate data.
The agency said the new venture will be based in Bethesda, Md., and an executive recruitment firm has been retained to fill the positions of chief executive and a board of managers.