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Wells Fargo: Fannie, Freddie risk-sharing deals lose their edge 

June 20, 2014
Ben Lane, Housing Wire

Tightening spreads mean investors can find greater yield elsewhere

Last year, Freddie Mac and Fannie Mae began offering credit-risk mortgage bond deals in an effort to attract private capital back into the mortgage finance system.

When the first deal was offered by Freddie Mac, Ed DeMarco, who at the time was the acting director of the Federal Housing Finance Agency, said, “The transaction — a direct debt issuance — will assist Freddie Mac in transferring credit risk to the private sector on recently-acquired, single-family conforming loans."

DeMarco said that the $500 million offering was an effort to contract the presence of the GSEs in the marketplace.

Read More: HousingWire

 

 
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