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Banking and Finance Deals & Dealmakers

Freddie protects $69B in mortgages

Freddie Mac’s Single-Family business announced that its Credit Risk Transfer (CRT) program transferred approximately $2.5 billion of credit risk on $69 billion of single-family mortgages from U.S. taxpayers to the private sector in the third quarter of 2019.

It brings the year-to-date total of credit risk transferred to $7.3 billion on $196 billion of single-family mortgages.

MIKE
REYNOLDS

“Freddie Mac is committed to the stability of the U.S. housing finance system, and CRT is a key component,” said Mike Reynolds, Vice President, Credit Risk Transfer.

“We will continue to offer attractive opportunities for private capital to participate in our program as we expand CRT coverage across our book of business.”

Through its offerings, Freddie Mac issued a total of six STACR and ACIS transactions in the third quarter — three on-the-run deals (DNA and HQA) and three seasoned deals (ARMR and FTR).

As a result of STACR and ACIS on the run transactions this quarter, Freddie Mac transferred between 80 percent (high LTV HQA series) and 90 percent (low LTV DNA series) of the credit risk on the underlying reference pools, helping to reduce capital required under the Conservatorship Capital Framework.

The Single-Family CRT programs transfer credit risk away from U.S. taxpayers to global private capital via securities and (re)insurance policies.

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