Freddie Mac has purchased additional reinsurance for the mortgages that it guarantees via its Agency Credit Insurance Structures (ACIS) program.
The new policies, underwritten by a panel of insurers and reinsurers, cover a combined maximum of approximately $155 million of losses for a portion of the credit risk associated with a pool of single-family loans acquired by Freddie Mac in the third quarter of 2013.
"This transaction is backed by a mix of new and returning participants," said Kevin Palmer, vice president of Freddie Mac's single-family strategic credit costing and structuring, said in a statement Wednesday. "These policies further demonstrate Freddie Mac's business strategy to expand risk sharing with private firms to reduce taxpayers' exposure to mortgage losses." He did not name the participants.
The transaction offloads a portion of the remaining credit risk associated with the same pools of mortgages covered by the company’s flagship Structured Agency Credit Risk (STACR) program.
Since mid-2013, when Freddie’s regulator, the Federal Housing Finance Agency, introduced a risk-sharing requirement, the GSE has completed nine STACR offerings and four ACIS transactions since mid-2013, transferring the risk on more than $205 billion of unpaid principal balance of single-family mortgages.