GSEs

Called Structured Agency Credit Risk Securitized Participation Interests, the new securities are backed by mortgage loans, and are not general obligations of the government-sponsored enterprise.

Many of the prime jumbo loans backing the transaction, JP Morgan 2017-4, were contributed by originators with limited history in that product, according to DBRS.

Mortgage investors want Freddie Mac to align its policy with Fannie Mae's when it comes to how delinquencies related to Hurricane Harvey affect credit risk transfer deals.

The portfolio of conforming loans is currently being subserviced by Nationstar Mortgage Holdings on behalf of Seneca Mortgage Investments.

Fannie Mae and Freddie Mac will adjust their risk-sharing deals so that they can accommodate high loan-to-value loans refinanced under the programs replacing the Home Affordable Refinance Program.

Credit risk transfers have emerged as more than just a method for mitigating taxpayer exposure. They could be a key component of comprehensive housing finance reform.

The government-sponsored enterprise is still looking for the right balance between offering a product that's attractive to investors and a cost-effective way to reduce risk.

The government-sponsored enterprises transferred $5.5 billion of credit risk on $174 billion of mortgages in their portfolios during the first quarter.

Rather than working with large-scale investors, Freddie Mac said it will focus on assisting community organizations and local institutions to fund single-family properties for renters with special needs.

Freddie Mac has priced its first credit-risk transfer securities backed in part by tax-exempt loans used to finance affordable multifamily rental properties.