With a lack of consensus from industry participants, let alone members of Congress, regarding how to reform the government-sponsored enterprises, the risk-sharing transactions implemented by the GSEs in recent years are seen as one possible model for increasing private capital investment in the mortgage market. Stanford Kurland, chairman and CEO of PennyMac Financial Services, suggested that the predominant risk-sharing transactions used by Fannie Mae and Freddie Mac have significant limitations. In an opinion piece published last week in the American Banker, Kurland said front-end risk-sharing “should be a bridge to long-term reform.” The main risk-sharing efforts completed by the GSEs are...