Fitch Says More Risk-Sharing Expected As Investors Grow
July 17, 2015
Fannie Mae and Freddie Mac will take part in more risk-sharing transactions in the coming months, especially upping their involvement in actual-loss deals as mortgage-backed securities investors appear to be willing to buy more risk, said Fitch Ratings in a report released this week highlighting GSE risk-sharing deals and trends. Freddie has had two risk-sharing deals this year where actual losses are passed on to investors based on actual recoveries at loan liquidation.Prior to those deals, risk-sharing transactions used pre-set loss severity schedules to determine investor loss exposure. Fannie said it plans to come to market with its first actual-loss deal as early as the fourth quarter of 2015.