Tag Archives: Credit Risk Transfer

To date, Fannie Mae's CAS program has resulted in the transfer of credit risk on single-family loans totaling more than a half trillion dollars. What enhancements did Fannie Mae make to the program?

FHFA's conservatorship scorecard called for Fannie Mae and Freddie Mac to lay off a certain amount of risk on single-family mortgages in 2015. Exactly how much credit risk did they transfer?

How much credit risk did Fannie Mae and Freddie Mac offload with their respective transactions announced this week?

The GSEs began their risk-sharing initiatives in 2013 as a way to transfer risk from taxpayers to private investors while the Enterprises remain in conservatorship of the FHFA. Since then, the GSEs have transferred a substantial portion of the credit risk for mortgages totaling hundreds of billions of dollars in unpaid principal balance (UPB).

The GSE continues to transfer credit risk away from taxpayers to private investors and expand its investor base.

Two and a half years after launching the first credit risk transfer program, Freddie Mac has succeeded in the transferring of a substantial portion of credit risk on more than $385 billion in single-family mortgages.

The latest STACR offering "reflects investors' positive view of the company's credit fundamentals," according to Mike Reynolds, VP of Credit Risk Transfer with Freddie Mac.

The FHFA's conservatorship of Freddie Mac continues, but the GSE has found an effective way to reduce exposure to credit risk while bringing private investors back into the single-family mortgage market.

“Releasing this data now will help give potential credit investors sufficient time to analyze Freddie Mac's actual loss performance,” said Kevin Palmer, SVP of Credit Risk Transfer at Freddie Mac.

Expansion was rare for the GSE's total mortgage portfolio from 2010 to 2014. But in 2015, it has been the norm.