Fannie Mae Executes Final Credit Insurance Risk Transfer Transaction of 2024 on $7.9 Billion of Single-Family Loans
Rhea-AI Summary
Fannie Mae has completed its seventh Credit Insurance Risk Transfer™ (CIRT™) transaction of 2024, transferring $338.6 million of mortgage credit risk to private insurers and reinsurers. The CIRT 2024-L4 transaction covers approximately 23,500 single-family mortgage loans with an unpaid principal balance of $7.9 billion. The deal introduces new structural enhancements, including faster coverage release for well-performing loan pools and premium obligations based on remaining coverage. Since inception, Fannie Mae has acquired $28.1 billion of insurance coverage on $935 billion of single-family loans through the CIRT program.
Positive
- Transfer of $338.6 million in mortgage credit risk to 26 insurers/reinsurers
- Enhanced CIRT structure with faster coverage release for well-performing loans
- Coverage of $7.9 billion in single-family mortgage loans
- Strong participation from insurance market with 26 insurers/reinsurers
Negative
- None.
News Market Reaction – FNMA
On the day this news was published, FNMA gained 1.32%, reflecting a mild positive market reaction.
Data tracked by StockTitan Argus on the day of publication.
New Enhancements Introduced to the CIRT Structure
"We appreciate the support of the 26 insurers and reinsurers that committed to write coverage on this deal, including the strong reception to the new structural enhancements that we introduced in the updated CIRT insurance policy," said Rob Schaefer, Fannie Mae Vice President, Capital Markets. Under the updated terms to the CIRT insurance policy, coverage will be released more quickly over the life of the transaction if the covered pool of loans continues to perform well. Additionally, the insurance premium obligation will be based on the amount of remaining coverage instead of the outstanding balance of the covered loan pool.
The covered loan pool for CIRT 2024-L4 consists of approximately 23,500 single-family mortgage loans with an outstanding unpaid principal balance (UPB) of approximately
With CIRT 2024-L4, which became effective September 1, 2024, Fannie Mae will retain risk for the first 170 basis points of loss on the
Coverage for this deal is provided based upon actual losses for a term of 18 years. Depending on the paydown of the insured pool and the principal amounts of insured loans that become seriously delinquent, the coverage amount may be reduced at the first month after the effective date of the policy and each month thereafter. The coverage on this deal may be canceled by Fannie Mae at any time on or after the five-year anniversary of the effective date by paying a cancellation fee.
Since inception to date, Fannie Mae has acquired approximately
To promote transparency and to help insurers and reinsurers evaluate the CIRT program, Fannie Mae provides ongoing, robust disclosure data, as well as access to news, resources, and analytics through its credit risk transfer webpages. This includes Fannie Mae's innovative Data Dynamics® tool that enables market participants to interact with and analyze both CIRT deals that are currently outstanding in the market and Fannie Mae's historical loan dataset. For more information on specific CIRT transactions, including pricing, please visit our Credit Insurance Risk Transfer webpage.
About Fannie Mae
Fannie Mae advances equitable and sustainable access to homeownership and quality, affordable rental housing for millions of people across America. We enable the 30-year fixed-rate mortgage and drive responsible innovation to make homebuying and renting easier, fairer, and more accessible. To learn more, visit:
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SOURCE Fannie Mae