The Federal Housing Finance Agency is looking for ways to expand the credit-risk transfer programs at Fannie Mae and Freddie Mac but showing little interest in a proposal being pushed by the Mortgage Bankers Association and private mortgage insurers. The regulator of the two government-sponsored enterprises recently issued a request for comment on front-end risk sharing without directly discussing the concept of sellers getting reduced guaranty fees for loans that have more than the required level of private MI coverage. It did, however, cite counterparty risk as one of the key issues in credit-risk transfers. As of Dec. 31, 2015, the GSEs had transferred...
The Federal Housing Finance Agency this week revealed estimates of how much it costs Fannie Mae and Freddie Mac to issue their popular credit-risk transfer debt notes, as well as more information on the kinds of investors that have been buying them. In addition to a report on the existing credit-risk transfer activities of the two government-sponsored enterprises, the FHFA also formally soliciting input on further development of the program, including the ongoing interest in so-called front-end CRT options. The FHFA’s cost estimates referred...
Several more court documents were released over the past week that offer additional details into the circumstances surrounding the Treasury Department’s decision to replace the quarterly dividend Fannie Mae and Freddie Mac had been paying in conservatorship with a net worth sweep. Industry observers say the new memos and deposition transcripts reinforce the notion that the government had been planning the sweep for a while before it was implemented in late 2012. The government-sponsored enterprises’ shareholders have been challenging...
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