Freddie Mac Deep MI CRT
Freddie Mac may periodically enter into insurance transactions with mortgage insurers or their affiliates to transfer additional risk beyond traditional mortgage insurance. This insurance-based risk sharing vehicle, Freddie Mac Deep MI CRT, represents a deeper level of risk transfer associated with certain Freddie Mac loans.
This is a credit risk transfer offering in the market that will provide upfront coverage on loans purchased from our diverse lender base as of the time of loan funding. This helps Freddie Mac manage the credit risk after the loan has come into the portfolio, but before the risk can be transferred through other structures.
These transactions provide an innovative opportunity for mortgage insurance companies and affiliates to invest in the credit performance of Freddie Mac's high quality Single-Family loans.
The pilot program executed its initial transaction in September 2016.
Deep MI CRT Features
- Deep MI CRT is designed as a 3-layer amortizing insurance structure and is subject to a minimum credit enhancement test.
- Freddie Mac holds the senior risk ("A layer"), which is not sold.
- Mezzanine risks are sold to investors ("M layer").
- Freddie Mac may retain all or a portion of the first-loss piece ("B layer").
- Includes a forward commitment to provide day-1 coverage on loans purchased by Freddie Mac during the loan acquisition period.
- Contract term is 10 years from the close of the Acquisition Period, and includes a clean-up call.
- Premiums will be paid monthly in arrears on the M layer balance with a one-time payment covering the acquisition period.
- Transactions are executed via a competitive, transparent auction process.
- A collateral trust account made up of cash and highly liquid assets will be required.
- Reporting Agents
- Reference Pool Disclosure File Layout (effective July 2018)
- Reference Pool Glossary (effective May 2018)
- Reference Pool Disclosure Guide (pre May 2018)
- Single Family Loan-Level Dataset & Summary Statistics
If you have a general question, please contact:
Freddie Mac New Transactions: