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Fannie Mae Hits $1 Trillion Milestone for Credit Risk Sharing Transactions
Thursday, June 1, 2017 6:35 AM

Innovative Credit Risk Sharing Program Reduces Taxpayer Risk and Strengthens the Housing Finance System

Fannie Mae (FNMA/OTC) said Wednesday that it has transferred to private investors a portion of the credit risk on single-family mortgages with an unpaid principal balance of $1 trillion at the time of the transactions through its credit risk transfer programs since 2013. This includes the company’s benchmark Connecticut Avenue Securities (CAS), Credit Insurance Risk Transfer (CIRT), and front-end lender risk sharing transactions. This milestone reinforces Fannie Mae’s commitment to develop broad and liquid markets for credit risk that reduce taxpayer risk, offer an attractive investment option for investors in mortgage credit, and help to build a stronger housing finance system.

“Fannie Mae’s credit risk sharing program has changed our business model,” said Andrew Bon Salle, EVP, Single-Family Mortgage Business, Fannie Mae. "It’s making us stronger, it’s making the housing finance system stronger, and it’s making taxpayers safer. Fannie Mae is proud to be a leader in a growing market for an entirely new asset class, one that is providing new avenues for investors to support housing opportunities for communities across the country.”

Through Fannie Mae’s market-leading credit risk management capabilities, the company acts as an intermediary between lenders and investors by setting standards, providing credit risk management oversight, and maintaining stability through business cycles. By developing a suite of credit risk-sharing initiatives, the company offers opportunities for financial institutions to invest in the credit performance of its single-family book of business. Fannie Mae provides exceptional transparency to investors through data, resources, and tools available on its website.

Fannie Mae’s credit risk sharing program has been recognized by leading industry publication, GlobalCapital, for successfully navigating the securitization market in 2016. GlobalCapital named Fannie Mae as the “Best Overall Issuer” for both single-family and multifamily products and “Best RMBS Issuer” for the CAS program. Fannie Mae’s Connecticut Avenue Securities, Series 2016-C01, transaction was named “Best RMBS Deal of the Year” and GlobalCapital recognized Fannie Mae’s single-family loan performance dataset as “RMBS Data Provider of the Year.”

Read more at Fannie Mae.