What’s the CSP and Why Should You Care?

Do you know what the CSP is? If you’re a Credit Union trying to be memberlicious, you need to find out. The CSP is the Common Securitization Platform. You can read all about it here.

In a nutshell, Fannie Mae and Freddie Mac formed a company called the Common Securitization Solutions, LLC. at the direction of their regulator, to develop a single mortgage-backed security to finance fixed rate mortgages. The idea is a solid one. It aims to take the two-different securitization “platforms and programs” and align them.

According to Fannie Mae’s website, “The goal is to bring additional liquidity and fungibility to the “To-Be-Announced” (TBA) market and to reduce or eliminate the trading disparities that exist today between the Enterprises’ (i.e. Fannie and Freddie) TBA securities. The components of the Single Security initiative include aligning (1) key features, which will mainly follow Fannie Mae’s MBS structure; (2) investor disclosures, which will generally follow Freddie Mac’s PCs; and (3) certain policies and practices related to the removal of loans from securities.”

“The CSP is a technology and operational platform that is being developed by Common Securitization Solutions, LLC, a joint venture of Fannie Mae and Freddie Mac. CSP will perform many of the core back office operations for the Single Security, as well as most of the Enterprises’ current securitization functions for single-family mortgages, on behalf of the Enterprises. The CSP is necessary for the implementation of the Single Security.”

That’s a lot of technical language and it may seem unimportant to Credit Unions, but it could be a really big deal. How so? Read on………

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Does Your Mortgage Process Make Sense?

Not too long ago, I stayed at a hotel and was walking down the stairs. I came across this door.



When I got closer, I could read the sign better.



So what’s the purpose of having a door to exit a stairwell, if it MUST remain closed at ALL times? How do you get out if you can’t open the door because if you open the door it’s not closed and the sign clearly says the door MUST remain closed at ALL times? And while I’m asking inane questions, what does this have to do with mortgage lending and being memberlicious ?

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Loan Quality and Service Levels as Part of Loan Officer Comp

Earlier this, I had a post about mortgage loan originator compensation and how your compensation plan should align with your Credit Union’s values.

Another good viewpoint of loan originator compensation is provided by the Stratmor Group, a popular mortgage consulting group, in their STRATMOR COMPENSATION CONNECTION SURVEY. According to their information, they’ve been conducting this study since 2010 to provide lenders with valuable insights into not only levels of cash compensation, but more importantly into how incentive plans are structured.

What are the key learnings from their study and what should memberliciuos Credit Unions be thinking about?

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What Does the Way You Pay Say?

Most Credit Unions are knee-deep in the budget process for 2017. If you’ve got responsibility for mortgage lending at your Credit Union, you should be thinking about your loan originator compensation programs for the upcoming year. They’ll have an impact on the amount of mortgage loans you can help members with and the income and expense of the Credit Union.

Plus, the CFPB is going to be looking again at loan officer comp to ensure comp plans are with their regulator framework.

With both those things going on, I thought it would be worthwhile to re-post one of my favorite blog entries from 2013….