Fannie Mae Executes Credit Insurance Risk Transfer Transaction on $21 Billion of Single-Family Loans
Fannie Mae (OTCQB: FNMA) has executed its fifth Credit Insurance Risk Transfer™ (CIRT™) transaction of 2022, transferring $733.3 million of mortgage credit risk to private insurers. This transaction covers approximately 67,700 single-family loans with a total unpaid principal balance of $21 billion. Since the program's inception, Fannie Mae has secured $19.2 billion in insurance on $656.6 billion of loans. This move aims to reduce taxpayer risk and enhance private capital's role in the mortgage market, effective from April 1, 2022.
- Fannie Mae transferred $733.3 million of mortgage credit risk, reducing taxpayer risk.
- Since inception, Fannie Mae secured $19.2 billion in insurance coverage.
- The CIRT program now covers $656.6 billion of loans, boosting private capital involvement.
- None.
WASHINGTON, May 20, 2022 /PRNewswire/ -- Fannie Mae (OTCQB: FNMA) announced today that it has executed its fifth Credit Insurance Risk Transfer™ (CIRT™) transaction of 2022. As part of Fannie Mae's ongoing effort to reduce taxpayer risk by increasing the role of private capital in the mortgage market, CIRT 2022-5 transferred
"We appreciate our continued partnership with the 22 insurers and reinsurers that have committed to write coverage for this deal," said Rob Schaefer, Fannie Mae Vice President for Capital Markets.
The covered loan pool for CIRT 2022-5 consists of approximately 67,700 single-family mortgage loans with an outstanding unpaid principal balance of approximately
With CIRT 2022-5, which became effective April 1, 2022, Fannie Mae will retain risk for the first 65 basis points of loss on the
Coverage for this deal is provided based upon actual losses for a term of 12.5 years. Depending on the paydown of the insured pool and the principal amount of insured loans that become seriously delinquent, the aggregate coverage amount may be reduced at the one-year anniversary and each month thereafter. The coverage on this deal may be canceled by Fannie Mae at any time on or after the five-year anniversary of the effective date by paying a cancellation fee.
As of March 31, 2022, approximately
To promote transparency and to help insurers and reinsurers evaluate the CIRT program, Fannie Mae provides ongoing, robust disclosure data, as well as access to news, resources, and analytics through its credit risk transfer webpages. This includes Fannie Mae's innovative Data Dynamics® tool that enables market participants to interact with and analyze both CIRT deals that are currently outstanding in the market and Fannie Mae's historical loan dataset. For more information on individual CIRT transactions, including pricing, please visit our Credit Insurance Risk Transfer webpage.
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