FHFA Releases Progress Report On GSEs CRT Programs

On March 27th, FHFA released a progress report on the GSEs Credit Risk Transfer (CRT) programs to date. The report shows that in 2016, the GSEs transferred approximately $18 billion of credit risk on mortgages with a combined unpaid principal balance (UPB) of $548 billion. That is an increase from 2015, when the GSEs transferred $16.1 billion of risk on mortgages with a UPB of approximately $420.4 billion. In total, the GSEs have transferred approximately $49 billion on $1.4 trillion in UPB since the inception of the CRT programs at the GSEs.

A HousingWire article covering the FHFA release notes that Fannie Mae began selling a portion of the risk on the first dollar of expected credit losses in 2016, and notes that Freddie Mac had begun such transfers in 2015, and continued selling risk on the first dollar of expected losses in 2016. In a statement, FHFA Director Mel Watt said that the GSEs will continue to explore options for CRT. "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," said Watt. "This report demonstrates the ongoing innovation, the progress being made, and our commitment to transparency as we continue to enhance these programs."

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