FHFA Prepayment and Issuance Reports–Powered by RiskSpan

Last month, the Federal Housing Finance Agency’s (FHFA) Division of Conservatorship published An Update on the Single Security Initiative and the Common Securitization Platform.  This report features several vintage and prepayment reports generated by RiskSpan’s RS Edge platform. Each month RiskSpan uses this platform to generate a wide range of prepayment and issuance reports for the...

In Defense of the Federal Home Loan Banks

We succumbed to some clickbait yesterday when we encountered a Risk.net article entitled “FHLBs: safe as houses?” The subheading ominously read, “Health of huge bank funder rests on home loans and money market funds.” It caught our attention because we are well acquainted with the Federal Home Loan Bank system—an affiliated group of government-sponsored enterprises,…

Credit Risk Transfer in a New World – The Waterfall of Risk Falls Squarely on Private Capital

Last month I highlighted the role of the front-end insurance risk share process around Credit Risk Transfer (CRT).  I reviewed what the front-end risk share model is in the current state and noted the expanded efforts underway to broaden the pool of MI’s and reinsurers as counterparties t o expand the front-end offerings.  This is in addition to the already successful back-end CRT which has found great success thus far.  So, the key question for 2017 is what does CRT look like in a post housing reform environment where much of the capital at risk is not the government credit guarantee but is comprised of private capital?

Credit Risk Transfer: Front End Execution – Why Does It Matter?

The FHFA issued an RFI to solicit feedback from stakeholders on proposals from the GSEs to adopt additional front-end credit risk transfer structures and to consider additional credit risk transfer policy issues. There is firm interest in this new and growing execution for risk transfer by investors who have confidence in the underwriting and servicing of mortgage loans through new and improved GSE standards.

Key Takeaways from Crisis-Era Loss Mitigation Programs for the Post-Crisis Environment

On July 25th, 2016 the U.S. Department of Treasury (Treasury), the U.S. Department of Housing and Urban Development (HUD), and the Federal Housing Finance Agency (FHFA) released a summary of “lessons learned” from the government’s crisis-era housing foreclosure prevention programs, with an eye towards the future of loss prevention programs in the post-crisis environment. The agencies identified five foundational principals for any future loss mitigation program from the 10.5 million mortgage modifications completed under this program during the prior seven years. Those principles are: Accessibility, Affordability, Sustainability, Transparency, and Accountability.

FHFA Releases “An Update on the Common Securitization Platform”

On September 15, 2015 the Federal Housing Finance Agency released an update on the Common Securitization Platform (CSP).  The report can be found at FHFA’s Common Securitization Platform website. Some of the highlights of the FHFA update are: Common Securitization Solutions, LLC (CSS) was established in October 2013 as an independent, jointly-owned business entity by Fannie Mae and Freddie Mac. (pg. 6) From 2012 through mid-2015, the Enterprises had invested $146 million in CSS (pg. 2)  In July 2015, CSS, Freddie Mac and Fannie Mae convened a Single Security/CSP Industry Advisory Group (pg. 19) All CSS employees are currently employees of either Fannie Mae or Freddie Mac.  CSS plans to convert its associates to CSS employees in the first half of 2016 (pg.2)