Freddie Mac Credit Protects $167.2 Billion of Single-Family Mortgages in Fourth Quarter

Rhea-AI Summary

Freddie Mac's Single-Family CRT program announced a record $4.8 billion of credit risk transfer in Q4 2020 on $167.2 billion of single-family mortgages, contributing to a total issuance of $16.9 billion for the year on over $475.8 billion of mortgages. Key transactions included STACR 2020-DNA5, the first linked to SOFR, and ACIS 2020-SAP1 with 15- to 20-year collateral. Since 2013, the program has cumulatively transferred $67.6 billion in credit risk across $1.9 trillion in mortgages, with 51% of the credit guarantee portfolio covered by enhancements.

Positive

• Achieved record $4.8 billion in credit risk transfer in Q4 2020.
• Total CRT issuance reached $16.9 billion in 2020, indicating strong growth.
• New STACR offering linked to SOFR demonstrates innovation and adaptability.

Negative

• None.

MCLEAN, Va., Feb. 22, 2021 (GLOBE NEWSWIRE) -- Freddie Mac’s Single-Family business today announced that its Credit Risk Transfer (CRT) program transferred credit risk via $4.8 billion of issuance on $167.2 billion of single-family mortgages from U.S. taxpayers to the private sector in the fourth quarter 2020. The issuance included STACR®, ACIS®, subordination and certain lender risk sharing transactions. In 2020, the company transferred risk via $16.9 billion of issuances on more than $475.8 billion of mortgages.

“Despite a challenging environment, Freddie Mac’s Single-Family CRT program closed out its biggest year ever in 2020,” said Freddie Mac’s Mike Reynolds, Vice President of Single-Family CRT. “Our effectiveness in managing risk and tailoring transactions to investor needs and market conditions, together with our ongoing commitment to leadership in this asset class, helped drive demand for our CRT products.”

Through its flagship offerings, Freddie Mac issued approximately $4.2 billion across three STACR and four ACIS transactions in the fourth quarter. Among the notable transactions was the STACR REMIC 2020-DNA5 offering, Freddie Mac’s first Single-Family CRT offering tied to the Secured Overnight Financing Rate (SOFR). Another was ACIS 2020-SAP1, a standalone ACIS contract featuring 15- to 20-year collateral rather than the typical 20- to 30-year collateral.

Since the first CRT transaction in 2013, Freddie Mac’s Single-Family CRT program has cumulatively transferred $67.6 billion in credit risk on $1.9 trillion in mortgages through STACR, ACIS, certain senior subordination securitization structures and certain lender risk sharing transactions. As of December 31, 2020, 51 percent of the Single-Family credit guarantee portfolio was covered by credit enhancement.

About Freddie Mac Single-Family Credit Risk Transfer
Freddie Mac’s Single-Family CRT programs transfer credit risk away from U.S. taxpayers to global private capital via securities and (re)insurance policies. We founded the GSE Single-Family CRT market when we issued our first Structured Agency Credit Risk (STACR®) notes in July 2013. In November 2013, we introduced our Agency Credit Insurance Structure® (ACIS®) program. Today, CRT serves as the primary source of private capital investment in residential mortgage credit. For specific STACR and ACIS transaction data, please visit Clarity, our CRT data intelligence portal.

About Freddie Mac
Freddie Mac makes home possible for millions of families and individuals by providing mortgage capital to lenders. Since our creation by Congress in 1970, we’ve made housing more accessible and affordable for homebuyers and renters in communities nationwide. We are building a better housing finance system for homebuyers, renters, lenders, investors and taxpayers. Learn more at FreddieMac.com, Twitter @FreddieMac, and Freddie Mac’s blog FreddieMac.com/blog.

MEDIA CONTACT: Fred Solomon
703-903-3861
Frederick_Solomon@freddiemac.com

FAQ

What was Freddie Mac's credit risk transfer issuance in Q4 2020?

Freddie Mac achieved $4.8 billion in credit risk transfer issuance in Q4 2020.

How much total credit risk was transferred by Freddie Mac in 2020?

In 2020, Freddie Mac transferred a total of $16.9 billion in credit risk.

What percentage of Freddie Mac's credit guarantee portfolio is covered by credit enhancements?

As of December 31, 2020, 51% of Freddie Mac's Single-Family credit guarantee portfolio was covered by credit enhancements.

What notable transactions did Freddie Mac complete in Q4 2020?

Freddie Mac completed key transactions like STACR 2020-DNA5 and ACIS 2020-SAP1 in Q4 2020.