Freddie Mac says it has reduced taxpayer exposure by obtaining insurance policies covering up to a combined maximum of $269.5 million of losses for a portion of the credit risk associated with a pool of single-family loans funded in the first quarter of 2013.
The government-sponsored enterprise (GSE) says the policies were underwritten by a group of well capitalized and established insurers and reinsurers and were obtained under Freddie Mac's Agency Credit Insurance Structure (ACIS), which has attracted private capital from non-mortgage guaranty insurers and reinsurers.
‘We have a good start on our goal to provide multiple avenues for sharing mortgage credit risk with a diverse spectrum of private investors,’ states Kevin Palmer, vice president of single-family strategic credit costing and structuring for the GSE.
‘Global reinsurers represent a large source of capital, and they are interested in expanding their product line to cover single-family mortgages. This year, we expect to execute multiple insurance transactions and bring in additional insurance and reinsurance companies," he adds.
Through Structured Agency Credit Risk and ACIS, Freddie Mac says it has laid off loss risk on more than $95 billion in qualifying single-family mortgages.