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Volume 2017 - Number 35

September 15, 2017

Freddie Mac G-fee Pricing Taking Cues from Credit-Risk Transfers and the Private Market

Credit-risk transfers can be used to calculate guarantee fees because theyíre indicative of what the private market would charge for the risk taken on by a government-sponsored enterprise, according to Freddie Mac. But the mortgage giant explained that g-fees are likely more stable than a system that relies exclusively on credit-risk transfers. Kevin Palmer, Freddieís senior vice president of single-family credit risk transfers, said in a white paper the significant amount of credit risk being transferred to the private capital markets provides a way to calculate a market-implied g-fee. Since 2013, the GSE has transferred much of the credit risk on $760 billion of MBS it guarantees. Based on the pricing of Freddieís Structured Agency Credit Risk transactions over the past year, the market-implied g-fee has been...

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



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What’s your opinion on how Mick Mulvaney has managed the CFPB since he took over three months ago?

He’s done a good job of paring back the agency’s excesses and we’d like to see more.
I hope he totally dismantles the agency and sends those functions back to the agencies hence they came.
Not bad, but he needs to take his time making additional changes.
We’re totally aghast. He’s gone way too far in protecting the rights of companies not consumers!

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