GSEs

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.