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Investments

GSE risk-sharing deals begin on a high note

High credit quality, minimal delinquencies

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Loan performances for government-sponsored enterprise risk sharing deals are off to a strong beginning, with deals remaining positive so far, according to the latest Fitch Ratings new monthly metric report.  

The new report follows the issuance and performance trends of the residential mortgage risk-sharing transactions issued by Fannie Mae and Freddie Mac.

“Since the first risk-sharing transaction was issued last year, issuance has been steady and performance has been excellent,” said Managing Director Grant Bailey.

Currently, six risk-sharing transactions have come to market, with quarterly issuance expected from both Fannie and Freddie.

In addition, delinquencies so far have been miniscule, with only 23 basis points of mortgage loans past due as of the most recent distribution date.

The clean payment behavior reflects the high credit quality of the borrowers, Bailey explained.

Furthermore, agency mortgages included in recent reference pools have better credit attributes than historical averages, even when compared to strong-performing vintages. 

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