Fannie Mae-No Politics (FNMA)

[10bambam]

Fannie Mae transfers $1.7bn of single-family mortgage risk to re/insurers
(So mean while Fannie just keeps taking care of business) That part was me!

31st July 2019 - Author: Matt Sheehan
US Government-sponsored enterprise, The Federal National Mortgage Association (Fannie Mae), has undertaken a new Credit Insurance Risk Transfer (CIRT) deal, securing $1.7 billion of re/insurance for a pool of primarily single-family affordable loans.
?This CIRT LR FE 2019-1 transaction provides front-end coverage of loans to be delivered to Fannie Mae over a forward 12-month period plus bulk coverage of existing loans, together insuring up to $1.75 billion of high loan-to-value ratios.
In aggregate, the transaction will transfer up to approximately $154 million of credit risk.
As part of Fannie Mae’s ongoing effort to reduce taxpayer risk by increasing the role of private capital in the mortgage market, it has committed to acquire about $9.4 billion of insurance coverage on $360 billion of single-family loans through the CIRT program to date.
“This deal pioneered new ground as our first CIRT transaction to cover a targeted pool of single-family affordable loans,” said Rob Schaefer, Vice President for Credit Enhancement Strategy & Management, Fannie Mae.
“We extend our deep appreciation for the insurer and reinsurer partners that work with us on unique deals such as this, along with our HFA and lender partners that originate and deliver these loans to Fannie Mae,” he continued. “Together, they help us serve our affordable housing mission that is at the heart of Fannie Mae’s business.”
“As this deal demonstrates, we continue to diversify our CIRT offerings, and are proud to be a leader in building and supporting the market for transferring Single-Family mortgage credit risk to private sources of capital.”
The latest CIRT deal secures commitments from a panel of eight insurers and reinsurers to cover up to $1.15 billion in unpaid principal balance for loans to be acquired by Fannie Mae between July 2019 through June 2020.
Additionally, this transaction covers approximately $600 million in unpaid principal balance of loans previously acquired by the company between January 2018 through August 2018.
All covered loans will be originated with fixed rate notes, original terms of 21 to 30 years, and loan-to-value ratios greater than 80 percent and less than or equal to 97%.
Fannie Mae will retain risk for the first 250 basis points of loss on the aggregate covered pool. If the $43 million retention layer is exhausted, reinsurers will cover the next 880 basis points of loss on the pool, up to a maximum coverage of approximately $154 million.

https://www.reinsurancene.ws/fannie-mae-transfers-1-7bn-of-single-family-mortgage-risk-to-re-insurers/