ACIS Program Sees Significant Innovation; Plays Critical Role in $1 Trillion CRT Milestone
MCLEAN, Va., June 25, 2018 (GLOBE NEWSWIRE) -- Freddie Mac (OTCQB:FMCC) announced today that it has obtained a new insurance policy under its Agency Credit Insurance Structure (ACIS®) program. This is the company’s fourth stand-alone ACIS credit-risk transfer (CRT) transaction, which provides a maximum limit of up to approximately $300 million of losses on single-family loans. ACIS 2018-SAP1 transfers credit risk on a $19.1 billion pool of 15 and 20-year mortgages purchased between May 1, 2017 and Feb. 28, 2018.
ACIS 2018-SAP1 marks the fourth transaction executed in 2018 under the ACIS program this year. In the first half of 2018, Freddie Mac issued an aggregate of approximately $1.2 billion credit risk transfer including the following:
- $285 Million in credit risk transferred under ACIS ARMR-1, which consists of HARP loans linked to STACR 2017-HRP1 offering
- $254 million in credit risk transferred under ACIS DNA-1, which consists of 60-80 percent loan-to-value loans linked to Freddie Mac’s STACR 2018-DNA1 offering
- $348 million in credit risk transferred under ACIS HQA-1, which consists of 80-97 percent loan-to-value loans linked to STACR 2018-HQA1 offering
- $300 million in credit risk transferred under ACIS SAP-1, which consists of 70-97 percent loan-to-value loans
“The ACIS program has been instrumental in attracting institution-based capital through reinsurers to CRT, and our innovations are making it a growing part of Freddie Mac’s robust toolbox to transfer mortgage credit risk away from taxpayers,” said Gina Healy, vice president of credit risk transfer. “Reinsurers are increasingly supporting various forms of credit risk transfer, including front-end risk transfer through our new ACIS AFRM program that provides pricing stability and committed capital over a two-year horizon as well as the ACIS ARMR program which transfers additional risk on the legacy portfolio.”
Healy continued, “These innovations are attracting more private capital to the market, as evidenced by the important $1 trillion credit risk transfer program milestone we recently reached. And we’re not stopping here. We’re already exploring new ways to make the housing finance system better for homebuyers, investors and taxpayers.”
Freddie Mac has led the market in introducing new credit risk-sharing offerings. Since 2013, the company has transferred a significant portion of credit risk on more than $1 trillion of UPB on single-family mortgages. The company has grown its investor base to more than 220 unique investors.
Freddie Mac makes home possible for millions of families and individuals by providing mortgage capital to lenders. Since our creation by Congress in 1970, we’ve made housing more accessible and affordable for homebuyers and renters in communities nationwide. We are building a better housing finance system for homebuyers, renters, lenders and taxpayers. Learn more at FreddieMac.com, Twitter @FreddieMac and Freddie Mac’s blog FreddieMac.com/blog.
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