[1]Freddie Mac [2] on Monday announced its intention [3] to sell its final Structured Agency Credit Risk (STACR [4]) debt notes offering of 2015, this time for $590 million. The latest STACR offering is the Enterprise’s eighth of the year and 17th overall since the program launched in 2013.
The latest offering, STACR 2015-HQA2, is Freddie Mac’s second actual loss offering of loans with LTVs ranging from 80 to 95 percent. The unpaid principal balance of the mortgages in the reference pool of loans for STACR 2015-HQA2 is more than $17 billion. The mortgages in the reference pool are 30-year fixed-rate single-family mortgages and were acquired by Freddie Mac during a four-month period between December 1, 2014, and March 31, 2015, according to the announcement.
With the STACR program, Freddie Mac is reducing its exposure to credit risk [5] and at the same time bring private investors back into the single-family market. Freddie Mac’s risk-sharing initiatives include 16 previous STACR debt note offerings and 11 Agency Credit Insurance Structure (ACIS) transactions since becoming the first agency to market credit risk transfer transactions with STACR and ACIS in the middle of 2013. Since then, Freddie Mac has grown its investor base to more than 170 unique investors, including reinsurers. The Enterprise has laid off a substantial portion of credit risk on single-family mortgages totaling $367 billion in UPB.
Freddie Mac’s conservator, the Federal Housing Finance Agency (FHFA [6]), recently announced in its Performance and Accountability Report for Fiscal Year 2015 [7] that both Fannie Mae and Freddie Mac have already met their credit risk transfer goals for the calendar year 2015. Freddie Mac has transferred credit risk on $126 billion in single-family mortgages this year, which is 6 billion higher than its goal of $120 billion for the year.
Fannie Mae [8] announced earlier in November [9] that their credit risk sharing initiatives were approaching the half trillion dollar mark in just two years.