The Federal Housing Finance Agency (FHFA) released its Credit Risk Transfer Progress Report, describing the status and volume of credit risk transfer transactions through the end of 2016.
The report provides a view of how government-sponsored entities Fannie Mae and Freddie Mac transfer a portion of credit risk to the private sector through a variety of transactions in both the single-family and multifamily housing markets.
In 2016, the two entities transferred $18 billion of credit risk on $548 billion of mortgages with an unpaid principal balance through capital markets, insurance, and pilot credit risk transfer (CRT) transactions. This brings the total, since the program began in 2013, to almost $49 billion of credit risk transferred on $1.4 trillion unpaid principal balance.
“Fannie Mae and Freddie Mac have made credit risk transfer a regular part of their business and they continue to improve and expand the scope of their programs and explore different transaction structures,” FHFA Director Melvin Watt said. “This report demonstrates the ongoing innovation, the progress being made, and our commitment to transparency as we continue to enhance these programs.”
The Credit Risk Transfer Progress Report provides data, definitions, and FHFA’s core principles in overseeing the Fannie Mae and Freddie Mac CRT programs. The report will be updated regularly.