Secondary Market

The loss will not cause Freddie Mac to need another draw from Treasury since it was only a fraction of the $1.8 billion net worth reserve the Enterprise has under the Preferred Stock Agreement, according to Layton. The dividends paid into Treasury by Freddie Mac remained unchanged at $96.5 billion, which is about $25 billion more than the $71 billion the Enterprise received in a taxpayer-funded bailout in 2008.

Watt said in a statement in July that the purpose of the pay raises was to "promote CEO retention, allow reliable succession planning, and ensure the continuity, efficiency and stability" at Fannie Mae and Freddie Mac. Watt's predecessor, Ed DeMarco, capped the GSE CEO pay at $600,000 a year more than three years ago after four years of conservatorship.

The serious delinquency rate on single-family mortgage loans backed by Fannie Mae is still well below its pre-crisis levels after declining by three basis points in September down to 1.59 percent. The serious delinquency rate on Fannie Mae-backed single-family mortgage loans has declined every quarter since Q1 2010.

The National Community Reinvestment Coalition (NCRC), the National Association for the Advancement of Colored People (NAACP), and the League of United Latin American Citizens (LULAC) sent a letter to President Obama, calling on the Administration to end the conservatorships and recapitalize Fannie Mae and Freddie Mac.

With that expansion of the total mortgage portfolio came a drop of four basis points in the serious delinquency rate for loans backed by Freddie Mac, down to 1.41 percent—a year-over-year decline of more than half a percentage point, from 1.96 percent in September 2014.

But the success of programs like the Connecticut Avenue Securities (CAS) Series by Fannie Mae and Structured Agency Credit Risk (STACR) debt note offerings by Freddie Mac have ensured that credit risk transfer is not simply a passing trend, but the way of the future for the GSEs look to transfer more credit risk to private investors.

Freddie Mac has obtained an insurance policy for more than half a billion dollars under its Agency Credit Insurance Structure (ACIS) program, bringing the total of insurance coverage the Enterprise has acquired this year to $1.5 billion through seven ACIS transactions, according to announcement from Freddie Mac.

The latest STACR offering, STACR Series 2015-DNA3, is the seventh STACR debt notes offering this year of more than $1 billion by Freddie Mac. It is the 15th STACR offering since the program began slightly more than two years ago. Freddie Mac’s goal is to transfer a portion of its credit risk on single-family loans to private investors.

Layton said Freddie Mac had moved on from the “early-years conservatorship mindset,” which saw the Enterprise being hesitant to take action while it waited for instructions from the government. Now, Layton said, “[w]e’re firmly facing the future, not the past.”

Fannie Mae announced on Wednesday the pricing of the latest risk-sharing transaction under the Connecticut Avenue Securities (CAS) Series at $1.45 billion. The latest transaction is Fannie Mae’s ninth under the CAS Series and first CAS transaction structured for an actual loss framework.