In June, Robert Fishman, deputy director of Federal Housing Finance Agency, was quoted saying, “The mortgage world has changed today.”
This was in response to Freddie Mac and Fannie Mae mortgage-backed securities being issued under a common security – the Uniform Mortgage-Backed Security. Through UMBS, the two GSEs finance fixed-rate mortgage loans backed by one- to four-unit single-family properties. It effectively replaced Fannie's MBS and Freddie's Participation Certificates, allowing them to trade in the same market.
The initiative for a single securitization infrastructure between the two entities has been around for quite some time. In 2013, the companies established Common Securitization Solutions to design and implement the single GSE bond through the Common Securitization Platform. David Applegate was appointed CEO at the jointly owned company’s launch. But on Thursday, Fannie and Freddie announced that Applegate is stepping down.
“In my conversations with the Board, I expressed that this was the optimal time for a transition, following the June launch of the Uniform Mortgage-Backed Security (UMBS) on the CSS-built Common Securitization Platform,” Applegate said. “Since I joined CSS in November of 2014, it has been my honor to work alongside the amazingly talented teams at CSS, Fannie Mae, Freddie Mac, FHFA, and our external partners to realize the vision for a Single Security.”
Prior to serving as CEO of CSS, Applegate was CEO and director of Dallas-based Homeward Residential, a mortgage lender and servicer. Even before that, during a 17-year career at General Motors Acceptance Corporation, he led GMAC Mortgage and GMAC Bank. Leaders at both Fannie and Freddie had only good things to say of Applegate’s leadership at CSS.
“The launch of the Common Securitization Platform was a once-in-a-generation achievement that required outstanding leadership, experienced management, and meticulous technical expertise,” said Jerry Weiss, executive vice president and chief administrative officer of Freddie Mac and chairman of the CSS board of managers. “Dave Applegate brought all those skills to this work, and we are extraordinarily grateful for his contributions.”
David Benson, president of Fannie Mae and a CSS Board member, echoed these sentiments.
“Under Dave Applegate’s leadership, CSS played a significant role in successfully implementing the UMBS,” Benson said. “The Single Security marks a fundamental and important shift in housing finance. Ensuring a seamless launch required a leader with deep industry experience, a clear vision, and the ability to unite multiple stakeholders around a complex set of requirements. We deeply appreciate Dave’s strong leadership and guidance during his time with CSS and we wish him every success in his next opportunity.”
The CSS board of managers has launched a search for Applegate’s replacement, which will include both internal and external candidates. In the meantime, the companies said he will stay on board to help ensure a smooth transition.