Freddie Mac has announced that its Single-Family and Multifamily Credit Risk Transfer (CRT) programs acquired credit protection of approximately $833m on more than $50 billion unpaid principal balance (UPB) of mortgage loans.
The deal was brokered by Aon plc, a leading global professional services firm, and sub-brokered by certified minority-business enterprise (MBE) Protecdiv in 2022.
Freddie Mac’s CRT programs transfer credit risk away from U.S. taxpayers to global private capital via securities and (re)insurance policies, providing stability, liquidity and affordability to the U.S. housing market.
Jeff Shue, senior director of Single-Family CRT, said: “We actively seek out third party-certified and self-certified minority businesses capable of meeting our demanding requirements as part of our overall effort to bring greater equity to the housing finance industry.”
In 2022, Freddie Mac’s Single-Family CRT ACIS (Agency Credit Insurance Structure) program closed three (re)insurance transactions, placed by Aon as broker and Protecdiv as sub-broker.
These included ACIS 2022-SPH3, which closed in November 2022, and ACIS 2022-SPL6 and ACIS 2022-SPL7, which closed in December 2022. Together the transactions totaled $634m of credit protection on $44.6 billion UPB of loans.
In the same month, Freddie Mac completed a Multifamily Credit Insurance Pool (MCIP) insurance-based credit risk sharing transaction, MCIP 2022-R5, with coverage of $198.9m on a reference pool of $5.5bn UPB, with Aon as broker and Protecdiv as a sub-broker.
Freddie Mac’s Robert Koontz, senior vice president for Multifamily Capital Markets, said: “Protecdiv is a certified MBE brokerage firm that focuses exclusively on large, enterprise-scale risks. We hope their participation in our transactions will help draw more minority-led firms into this space. Freddie Mac is committed to supporting equity throughout the housing industry.”
Joe Monaghan, Global Growth Leader for Aon’s Reinsurance Solutions and CEO of Aon’s Public Sector Partnership, said: “Aon has proudly served Freddie Mac for nearly a decade, brokering their ground-breaking mortgage reinsurance programs.
“We are thrilled to collaborate with Protecdiv as we continue to deliver on Freddie Mac’s and Aon’s shared commitment to greater inclusion and diversity, innovation, and impact.”
Kael Coleman, founder and chief executive officer at Protecdiv, added: “We are delighted to work with Freddie Mac and to help it achieve its vital mission, including its effort to improve equity in the housing finance industry.
“Protecdiv was built to service the supplier diversity goals of large U.S. businesses and public entities. Through our proud collaboration with Aon, we now have the scale, alongside our diverse supplier qualifications and extensive expertise, to service large corporations.”
