Investments

Fannie Mae makes more information available for risk-sharing investors

Will now make monthly loan-level disclosure data on for CIRT deals

Investors of different shapes and sizes seem to be flocking to the risk-sharing deals from Fannie Mae and Freddie Mac. A recent report suggested that the government-sponsored enterprises’ risk-sharing deals will be a big target for investors in 2018.

In order to provide investors with as much detail as possible, Fannie Mae announced this week that it is making additional disclosures about some of its risk-sharing deals.

According to an announcement from the GSE, it will now make monthly loan-level disclosure data available for its Credit Insurance Risk Transfer deals.

To reduce risk for American taxpayers, Fannie and Freddie created programs that allow reinsurers to cover part of a loss in case of borrower default. Fannie’s CIRT deals fall into that category.

According to Rob Schaefer, Fannie Mae’s vice president for credit enhancement strategy & management, the GSE is providing this information to provide additional transparency into the CIRT deals.

“We provide this information in order to improve reinsurers’ ability to monitor their investments in the CIRT program,” Schaefer said in an announcement. “Our goal is to develop broad and liquid markets for credit risk that reduce taxpayer risk, minimize the impact to borrowers and lenders, offer an attractive investment option for investors in mortgage credit risk, and help to build a stronger housing finance system.”

Since 2013, Fannie Mae transferred a portion of the credit risk on approximately $1.2 trillion in single-family mortgages through its various risk-sharing programs.

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