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Volume 2014 - Number 2

January 17, 2014

Fannie Sticks With the Mold on Latest Risk-Sharing Transaction, Doubts Creep in About Non-TBA Deals

Fannie Mae this week priced its second capital markets risk-sharing transaction, offering a total of $750 million in tranches for sale based off a reference pool of $29.31 billion in agency mortgages. The deal uses the same synthetic structure seen on previous risk-sharing transactions from the government-sponsored enterprises. Edward DeMarco, the former acting director of the Federal Housing Finance Agency, had been pushing the GSEs to issue risk-sharing deals using a senior-subordinate structure that would not be eligible for the to-be announced market. With Mel Watt now the director of the FHFA, non-TBA risk-sharing transactions from the GSEs could be even less likely. Laurel Davis, vice president for credit risk transfer at Fannie, said...

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This weekly covers the secondary mortgage market, including mortgage-backed securities and asset-backed securities.

 

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With originations expected to drop in 2018, will your shop turn to non-QM/non-prime mortgage products as a way to bolster volumes?

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