Fannie Mae has announced the transfer of $700m of mortgage credit risk to private re/insurers through its Credit Insurance Risk Transfer (CIRT) 2022-9 program, as part of its ongoing effort to reduce taxpayer risk by increasing the role of private capital in the mortgage market.
Rob Schaefer, Fannie Mae Vice President for Capital Markets said, “We appreciate our continued partnership with the 23 insurers and reinsurers that have committed to write coverage for this deal.”
Since its inception, Fannie-Mae states it has acquired approximately $22bn of insurance coverage on $730bn of single-family loans through the CIRT program, measured at the time of issuance for both post-acquisition (bulk) and front-end transactions. This latest CIRT transaction is the ninth of 2022.
The covered loan pool for CIRT 2022-9 consists of approximately 69,000 single-family mortgage loans with an outstanding unpaid principal balance of approximately $21bn, says Fannie Mae.
The covered pool includes collateral with loan-to-value ratios of 60% to 80% acquired in October 2021.
It adds that the loans included in this transaction are fixed-rate, generally 30-year term, fully amortizing mortgages and were underwritten using credit standards and enhanced risk controls.
With CIRT 2022-9, Fannie Mae will retain risk for the first 55 basis points of loss on the $21 billion covered loan pool. If the $115 million retention layer is exhausted, 23 insurers and reinsurers will cover the next 335 basis points of loss on the pool, up to a maximum coverage of $700 million.
