Freddie Mac Sells Off Residential Mortgage Credit Risk
July 24, 2013
In an effort to bring more private capital to the mortgage securities market and reduce taxpayer risk, today we issued a press release on our new credit risk transfer initiative, Structured Agency Credit Risk (STACR). Through STACR, we are selling off single-family residential mortgage credit risk.
We are launching this new credit risk transfer initiative to meet our corporate goals and the Federal Housing Finance Agency's 2013 Conservatorship Scorecard.
In addition to introducing more private capital to the secondary mortgage market, STACR will reduce Freddie Mac's exposure to single-family mortgage credit risk for recently acquired residential loans. The risk will be transferred to private investors who invest in the STACR debt notes, which are unsecured and unguaranteed issued by Freddie Mac. Our principal payments are determined by the delinquency and principal payment performance for mortgages in a STACR Reference Pool.
The reference pool consists of 30-year fixed-rate single-family mortgages acquired by Freddie Mac during the third quarter of 2012, excluding Home Affordable Refinance Program and other government-insured loans.
If you have borrowers whose loans are included in the STACR reference pool, they are still eligible for the Making Home Affordable programs, including the Home Affordable Modification Program.
With STACR, you are able to continue selling loans to Freddie Mac, maintaining the same liquidity and pricing transparency as you have today, and since we retain servicing control there will be no changes to the servicing requirements or the support we provide on loss mitigation.
For more information, visit the Credit Risk Offerings Web page on FreddieMac.com.
For questions, please contact your Freddie Mac representative.