In an effort to offload more risk to taxpayers on its single-family mortgages, Freddie Mac began its Structured Agency Credit Risk (STACR) program in 2013 and soon expanded its credit risk offerings with its Agency Credit Insurance Structure (ACIS) and Whole Loan Securities (WLS) programs with the same goal in mind.
Freddie Mac recently announced that between these three programs, it transferred risk on $215 billion worth of single-family mortgages for the full year of 2016 while providing approximately $8.25 billion in loss protection to taxpayers during the year—$5.5 billion in STACR issuances, $2.7 billion in ACIS transactions, and $500,000 in WLS.
“It was a very good year for Freddie Mac's single-family credit risk transfer program,” said Kevin Palmer, SVP of single-family portfolio management. “Investor demand was strong across all our offerings in 2016 -- STACR, ACIS and WLS—and we now have more than 200 unique investors in our program. It's clear that credit risk transfer is becoming a permanent fixture in the fixed-income and reinsurance markets.”
Palmer continued, “We look forward to being in the market regularly with our current offerings in 2017. At the same time, we'll continue to work toward our strategic goal to explore new asset classes for investors that protect taxpayers and meet our core key principals of credit risk transfer.”
To date, Freddie Mac has provided approximately $25 billion in loss protection to taxpayers while transferring risk on approximately $602 billion worth of single-family mortgages since launching STACR in 2013. Approximately $18.2 billion of that has been through STACR issuances, $6.2 billion through ACIS transactions, and $1 million through WLS.
Click here for more information on Freddie Mac’s single-family credit risk offerings.