Freddie Mac has taken out another reinsurance policy that transfers risk of default on mortgages it insures.
This particular agency credit insurance structure (ACIS) provides coverage based on the actual losses incurred by the government sponsored enterprise on a referenced pool of residential mortgages for up to $450 million.
By obtaining this policy, Freddie has sold off much of what it still held in credit risk associated with another transaction, Structured Agency Credit Risk (STACR) 2016-DNA1.
Both transactions relate to a pool of recently-acquired single-family mortgages with an unpaid principal balance of more than $35.7 billion. The pool consists of loans with original loan-to-value ratios of over 60% and less than or equal to 80% with a weighted average original combined LTV of 76%.
"We continue to increase the diversity of private capital investors in our credit risk transfer offerings and have built strong relationships with a growing number of ACIS insurers and reinsurers," Kevin Palmer, senior vice president of single-family credit risk transfer, said in a press release. "This transaction is supported by the largest panel of insurers and reinsurers to date. ACIS continues to play an important role in our credit risk transfer strategy, and we expect to have these transactions on a regular basis."
Freddie Mac has almost $4 billion in insurance coverage through 15 ACIS transactions since the program's inception in 2013.