Freddie Mac’s Single-Family business today announced that its Credit Risk Transfer (CRT) transactions transferred $5.1 billion of credit risk on $140.7 billion of single-family mortgages from U.S. taxpayers to the private sector in the first quarter of 2020.
“Freddie Mac Single-Family’s first quarter CRT issuance significantly exceeded our first quarter totals from just a year ago, a result of our effort to accelerate the time from a loan’s acquisition to its placement in a CRT reference pool,” said Mike Reynolds, Vice President, Credit Risk Transfer. “In the face of the quarter’s challenging economic environment, the CRT program continued to show its value as a risk management tool.”
Through its flagship offerings, Freddie Mac issued approximately $4.5 billion across seven on-the-run DNA and HQA STACR® and ACIS® transactions in the first quarter. Subordination and lender risk sharing made up the balance of issuances in the quarter. As a result of STACR and ACIS on-the-run transactions this quarter, Freddie Mac transferred between 79 percent (high LTV HQA series) and 90 percent (low LTV DNA series) of the credit risk on the underlying reference pools.
Since the first CRT transaction in 2013, Freddie Mac’s Single-Family CRT program has cumulatively transferred a portion of the credit risk on $1.6 trillion in mortgages. As of March 31, 2020, 51 percent of the Single-Family credit guarantee portfolio was covered by CRT transactions, and conservatorship capital needed for credit risk on this population was reduced by approximately 75 percent through these transactions.
About Freddie Mac Single-Family Credit Risk Transfer
Freddie Mac’s Single-Family CRT programs transfer credit risk away from U.S. taxpayers to global private capital via securities and (re)insurance policies. We founded the GSE Single-Family CRT market when we issued our first Structured Agency Credit Risk (STACR®) notes in July 2013. In November 2013, we introduced our Agency Credit Insurance Structure (ACIS®) program. Today, CRT serves as the primary source of private capital investment in residential mortgage credit. For specific STACR and ACIS transaction data, please visit Clarity, our CRT data intelligence portal.
About Freddie Mac
Freddie Mac makes home possible for millions of families and individuals by providing mortgage capital to lenders. Since our creation by Congress in 1970, we’ve made housing more accessible and affordable for homebuyers and renters in communities nationwide. We are building a better housing finance system for homebuyers, renters, lenders, investors and taxpayers. Learn more at FreddieMac.com, Twitter @FreddieMac, and Freddie Mac’s blog FreddieMac.com/blog.
MEDIA CONTACT: Fred Solomon