Fannie Mae hosted an investor call Wednesday to present an overview of its approach to single-family credit risk management, a spokesman confirmed.
The government-sponsored enterprise “discussed its approach to managing credit risk over the mortgage loan lifecycle and shared how its ongoing commitment to risk management strengthens loan performance and reduces losses,” the spokesman said in an email.
He said the web conference was held “in anticipation of providing financial institutions with the opportunity to invest in Fannie Mae's single-family book of business through credit risk sharing transactions.”
Fannie Mae and Freddie Mac have been ordered by their regulator, the Federal Housing Finance Agency, to offload the credit risk involving single-family mortgages with at least $30 billion of unpaid principal balance in 2013. Freddie is two-thirds of the way there; in July, it sold $500 million of bonds whose principal repayment is linked to prepayments and defaults on $20 billion of residential mortgages.
Freddie’s inaugural risk-sharing bond was structured as unsecured debt, but market participants say Fannie has a different structure in mind.
A market participant who did not take part in the investor call said he has been told that Fannie will make a replay available within the next couple of weeks.