This story appeared in Bank Digest.
The Federal Housing Finance Authority has issued two documents that it said are intended to enhance public awareness of, and involvement in, the credit risk transfer programs of Fannie Mae and Freddie Mac (the Enterprises). According to the agency, the "Single-Family Credit Risk Transfer Progress Report" provides an overview of how the Enterprises share credit risk with the private sector through primary mortgage insurance and through credit risk transfer transactions and also details the status and volume of credit risk transfers through the end of 2015.
The "Single-Family Credit Risk Transfer Request for Input" lays out the FHFA's principles of credit risk transfer and seeks feedback from stakeholders on proposals for the Enterprises to adopt additional front-end credit risk transfer structures and on other credit risk transfer policy issues. Written responses to the questions and additional comments on topics identified in the Request for Input must be provided by Aug. 29, 2016.
Responding to the FHFA's announcement, Rep. Ed Royce (R-Calif) said the Enterprises "should be engaged in significant and increasing risk transfer transactions. An all-of-the-above approach is needed to ensure all types and sizes of mortgage originators can help decrease taxpayer risk." He also said that "Congressional action is ultimately needed to ensure a strong and stable housing market built on private capital."