Freddie Mac Structured Agency Credit Risk (STACR®)
Freddie Mac has developed a new type of credit security called Structured Agency Credit Risk (STACR) securities. With STACR securities, Freddie Mac intends to reduce its exposure to single-family mortgage credit risk for recently-purchased loans and transfer that risk to private investors who purchase the securities. Through STACR, Freddie Mac is working to minimize potential credit losses and add a layer of protection against taxpayers’ exposure.
The timing and amount of payments on STACR securities will be determined based on a STACR Reference Pool consisting of recently-originated 30-year single-family mortgages that Freddie Mac acquired within a specified time period.
STACR securities are unique because most other industry securities that transfer mortgage credit risk are based on relatively small pools, generally less than 1,000 loans. The STACR Reference Pools will be large and highly-diversified reference pools, which will provide more stable and predictable performance.
The Reference Pool doesn’t include Relief Refinance mortgages (including Home Affordable Refinance Program loans) or government-insured loans. STACR securities are designed to have minimal, if any, impact on the To Be Announced (TBA) market.
The first STACR offering is an issue of STACR debt notes.