Reinsurers have helped Virginia-headquartered Federal Home Loan Mortgage Corporation (Freddie Mac) offload $1.2 billion of risk this year, via its Agency Credit Insurance Structure (ACIS) program.
ACIS 2018-SAP1, the Company’s fourth stand-alone ACIS credit-risk transfer (CRT), provides a maximum limit of up to approximately $300 million of losses on single-family loans.
Gina Healy, Vice President of credit risk transfer, commented, “Reinsurers are increasingly supporting various forms of credit risk transfer, including front-end risk transfer through our new ACIS AFRM program that provides pricing stability and committed capital over a two-year horizon as well as the ACIS ARMR program which transfers additional risk on the legacy portfolio.”
The new policy is the fourth transaction executed in 2018 under the ACIS program and transfers credit risk on a $19.1 billion pool of 15 and 20-year mortgages purchased between May 1, 2017 and Feb 28, 2018.
Healy continued, “The ACIS program has been instrumental in attracting institution-based capital through reinsurers to CRT, and our innovations are making it a growing part of Freddie Mac’s robust toolbox to transfer mortgage credit risk away from taxpayers.”
“These innovations are attracting more private capital to the market, as evidenced by the important $1 trillion credit risk transfer program milestone we recently reached. And we’re not stopping here. We’re already exploring new ways to make the housing finance system better for homebuyers, investors and taxpayers.”
