Freddie Mac Increases CRT, Portending a Business Model Development

As reported in Asset Securitization Report, Freddie Mac CEO Don Layton reported in a Q1 2018 earnings call that the enterprise has transferred credit risk on nearly 40 percent of its outstanding single-family portfolio to the private sector, which is up from 30 percent last year. Mr. Layton believes the increase in Credit Risk Transfer (CRT) portends a future model where, “Freddie Mac acts primarily as a conduit for credit risk rather than the traditional, historic buy-and-hold owner.” However, Layton emphasized that neither change would impact credit underwriting decisions. 

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