The new products will allow Fannie to shed some of its credit risk and also reduce the amount of capital it has to hold against these loans.

Over the past six weeks, Freddie has issued eight multifamily offerings totaling $6.1 billion, and Fannie more than $10 billion.

Freddie promotes Donna Corley as EVP of single-family business.

The hiatus in the net worth sweep added $12.53 billion to the GSEs’ combined net worth over the last six months of 2019, including fourth-quarter profit of $4.27 billion at Fannie and $2.45 billion at Freddie. (Includes data chart.)

Democratic senators ask Fannie and Freddie if they have attempted to model the risks associated with climate-related disasters, including floods, wildfires and extreme weather events.

Industry advocates point out that, unlike other forms of credit-risk transfer, private mortgage insurance stands in front of all other losses.

The GSEs’ loan performance data excludes various loan types, such as ARMs and low-documentation loans, that performed poorly in the financial crisis. Nearly half of the GSE loans originated in 2006 and 2007 are expurgated from the data provided to CRT investors.

The transaction is structured so that Fannie retains the first 40 basis points of losses. Once the $42 million retention layer is exhausted, re-insurance will cover the next 375 bps of losses.

Treasury claims the GSEs’ unfair advantage is because of their capital treatment. Urban Institute researchers say it’s because of the government backstop of their credit risk.