Fannie Mae executes two credit insurance risk transfer transactions on $33 billion in single-family loans

Fannie Mae executes two credit insurance risk transfer transactions on $33 billion in single-family loans

WASHINGTON, July 22, 2022 /PRNewswire/ — Fannie Mae (OTCQB: FNMA) today announced that it has executed its seventh and eighth Credit Insurance Risk Transfer™ (CIRT™) transactions of 2022. As part of Fannie Mae’s ongoing effort to reduce taxpayer risk by increasing its role in the private equity mortgage market, CIRT 2022-7 and CIRT 2022-8 transferred 1 billion dollars on the credit risk of mortgage loans for private insurers and reinsurers. From inception to date, Fannie Mae has acquired approx 21 billion dollars insurance coverage is on 709 billion dollars of single-family loans through the CIRT program, measured at origination for both post-acquisition (bulk) and front-end transactions.

(PRNewsfoto/Fannie Mae)

“We appreciate our continued cooperation with the 24 insurers and reinsurers who have committed to underwriting these transactions,” said Rob SchaeferVice President, Capital Markets, Fannie Mae.

The loan pool secured by CIRT 2022-7 consists of approximately 64,000 single-family mortgage loans with an outstanding principal amount of approximately $19.8 billion. The secured pool includes collateral acquired in the year with a loan-to-value (LTV) ratio of 60.01 percent to 80.00 percent. September 2021. The loans involved in this transaction are fixed-rate, generally 30-year terms, fully amortizing mortgages, and under strict credit standards and enhanced risk controls.

With CIRT 2022-7, which entered into force June 1, 2022Fannie Mae retains risk for the first 55 basis points of loss $19.8 billion covered loan pool. If 109 million dollars the retention layer is exhausted, the 24 insurers and reinsurers in the pool cover the next 335 basis points of losses up to the maximum coverage. 664 million dollars.

The loan pool secured by CIRT 2022-8 consists of approximately 43,000 single-family mortgage loans with an outstanding principal amount of approximately $12.9 billion. The secured pool includes securities with LTV ratios between 80.01 and 97.00 percent acquired during August 2021 and September 2021. The loans involved in this transaction are fixed-rate, generally 30-year terms, fully amortizing mortgages, and under strict credit standards and enhanced risk controls.

With CIRT 2022-8, which entered into force June 1, 2022Fannie Mae retains the first 65 basis points of risk of loss $12.9 billion covered loan pool. If 84 million dollars the retention layer is exhausted, 19 insurers and reinsurers in the pool cover the next 275 basis points of maximum coverage of losses. 354 million dollars.

Coverage for these transactions is provided on the basis of actual losses over a period of 12.5 years. Depending on coverage payouts and the principal amount of seriously delinquent insurance loans, aggregate coverage amounts may be reduced on the one-year anniversary and monthly thereafter. Fannie Mae may cancel coverage for these transactions at any time on or after five years from the effective date by paying a cancellation fee.

Since March 31, 2022about 906 billion dollars UPB loans in the ordinary course of our single-family business were included in the reference pool of the credit risk transfer transaction.

To promote transparency and assist insurers and reinsurers in evaluating the CIRT program, Fannie Mae provides continuous and reliable disclosures, as well as access to news, resources and analysis, through its credit risk transfer web pages. This includes Fannie Mae’s innovative data dynamics® a tool that allows market participants to communicate and analyze both current CIRT transactions in the market as well as Fannie Mae’s historical loan data. For more information on individual CIRT transactions, including pricing, please visit our Credit Insurance Risk Transfer website.

About Fannie Mae
Fannie Mae promotes fair and sustainable access to homeownership and quality, affordable rental housing for millions of people. We enable 30-year fixed rate mortgages and lead responsible innovation to make buying and renting a home easier, fairer and more accessible. For more information visit:
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SOURCE Fannie Mae

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