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Fannie Mae offloads more credit risk to insurers

By Ben Lane

Seeking to further decrease the taxpayers’ liability, Fannie Mae announced Tuesday that it completed its third credit risk-sharing transaction as part of its Credit Insurance Risk Transfer program.

The Credit Insurance Risk Transfer program shifts credit risk on a pool of loans to a panel of reinsurers. The deal helps to further diversify its counterparty exposure and reduce taxpayer risk by increasing the role of private capital in the mortgage market, Fannie said.

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