Federal Reserve guidance issued in 2023 has opened up depositories to issue more synthetic-risk transfer securitizations in a market that was historically dominated by European banks.

Credit-risk transfer activities at Fannie Mae and Freddie Mac wobbled in the second quarter after a modest increase in the first three months of 2025. Issuance fell for STACRs but not for CAS notes. (Includes data table.)

The partnership adds to the growing number of issuers who are working with third parties to offset capital requirements for risk retention.

To this point, Freddie has issued multifamily risk-sharing transactions without ratings. The Morningstar DBRS rating could open these multifamily CRT deals to institutions that only invest in rated transactions.

Fannie will take the first losses on the transaction, with additional losses borne by Bayview and investors in the deal. That’s a change from the typical CRT from Fannie where a third-party like Bayview isn’t involved.

Stop-advance standard for non-agency MBS under consideration; EJF Capital works with Third Coast Bank on another CRT; MISMO proposes standards for electronic HELOCs.

Fannie Mae and Freddie Mac both saw a significant increase in CRT issuance in the first quarter. Fannie also boosted credit-risk insurance purchases, but ACIS purchases were down at Freddie. (Includes data table.)

A survey by Moody’s found that a relatively small share of banks have issued credit-risk transfer deals in recent years.

Only a handful of banks with less than $25 billion in assets have completed CRT transactions.

If the GSEs are released from conservatorship, some participants in the agency MBS market insist the to-be-announced market, uniform MBS and Fannie/Freddie CRT activity should remain untouched.