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Freddie Mac Passes $50B in Credit Risk Transfers

Freddie Mac recently announced that its Single-Family Credit Risk Transfer (CRT) programs have surpassed the $50 billion mark in transferring credit risk to private investors and (re)insurers. From program inception to date, the company has transferred a portion of the credit risk on more than $1.3 trillion of Single-Family mortgages based on unpaid principle balance (UPB) at issuance.

Per Federal Housing Finance Agency (FHFA) guidelines, Freddie Mac now transfers the credit risk on more than 90% of the UPB on CRT-eligible, newly-acquired Single-Family mortgages.

“I am proud of our accomplishments and the positive impact we are making on the U.S. housing finance industry,” said Mike Reynolds, VP, Single-Family Credit Risk Transfer. “Freddie Mac will continue to lead the industry with innovation in the CRT space and set the standard for credit risk management.”

The goal of Freddie Mac’s Single-Family CRT programs is to transfer credit risk away from U.S. taxpayers to global private capital via securities and (re)insurance policies. Earlier this year, Freddie Mac reported a slight increase in comprehensive income in Q2 2019 from the previous quarter, up to $1.8 billion.

“Freddie Mac’s second quarter continued our growing track record of strong returns, solid risk management and an unwavering commitment to our mission,” said Freddie Mac CEO David Brickman. “Once again, we made home possible for hundreds of thousands of families across the country.”

Freddie Mac’s release also notes how the GSE prevented foreclosure in the first half of 2019, having completed approximately 26,000 single-family loan workouts in the six months ended June 30, 2019.

Fannie Mae and Freddie Mac completed 1,746 foreclosure prevention actions in April 2019, according to the latest FHFA Foreclosure Prevention, Refinance, and Federal Property Manager's Report. The report states that the GSEs have completed 4,334,550 since the start of conservatorship in September 2008.

In the six months that ended on June 30, 2019, Freddie Mac provided approximately $212 billion in liquidity to the market. Freddie funded around 702,000 single-family homes, approximately 445,000 of which were home purchase loans, and around 343,000 multifamily rental units.


About Author: Seth Welborn

Seth Welborn is a Reporter for DS News and MReport. A graduate of Harding University, he has covered numerous topics across the real estate and default servicing industries. Additionally, he has written B2B marketing copy for Dallas-based companies such as AT&T. An East Texas Native, he also works part-time as a photographer.

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