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Fannie, Freddie Continue To Transfer Credit Risk 

June 22, 2016


Government sponsored enterprises (GSEs) Fannie Mae and Freddie Mac continue to transfer credit risk on certain pools of mortgages they hold over to investors and the private insurance industry.

Fannie Mae last week announced that it had completed three credit risk transfer deals that cumulatively represent the largest transaction to date for the company since it started its credit risk transfer program in 2013. In combination, the three deals shifted the risk on loan pools with about $22.5 billion in unpaid principal balance (UPB) to a group of insurers and reinsurers. The pools consisted of  a 30-year, fixed-rate product with a loan-to-value (LTV) between 80% and 97%.

“We are pleased that interest from insurers and reinsurers in our [credit risk transfer] program continues to grow, as demonstrated by our ability to cover this large aggregate pool of loans, and this reflects the confidence that those participants have in Fannie Mae’s strong credit risk management approach,” says Rob Schaefer, vice president of credit enhancement strategy and management for Fannie Mae, in a release. Read more

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