Fannie, Freddie Provide More Details on Credit Risk Transfers
March 4, 2016
Freddie Mac and Fannie Mae recently enhanced the disclosures for their single-family credit risk transfers to give potential investors more information on the deals. Investors and lawmakers have been calling for more transparency since the GSEs began transferring credit risk several years ago.Freddie’s disclosures for all single-family credit risk transfer initiatives will now include quarterly updates on credit scores for outstanding loans in all transactions as well as quarterly updated mark-to-market loan-to-value ratios. Freddie said this leverages the estimated property value from its Home Value Explorer Automated Valuation Model tool. Investors can analyze loan-level mortgage insurance details and identify whether or not the lender or the borrower paid the mortgage insurance on the loan.