Structured Finance Association Applauds Fannie Mae Return to CRT Issuance

The Structured Finance Association (SFA) released the following statement after Fannie Mae priced its first Agency Credit Risk Transfer (CRT) transaction since February 2020.

“We are pleased to see Fannie Mae return to the CRT market through their Connecticut Avenue Securities (CAS) program,” said Michael Bright, CEO of the Structured Finance Association. “With Freddie Mac having continued to issue CRT throughout the pandemic, the return of this activity from Fannie Mae means that the GSE CRT programs collectively represent an attractive investment opportunity for committed capital and an important source of risk reduction at the enterprises. As a cost-effective means of hedging risk, the benefits of CRT are also passed along to American homeowners. We also applaud FHFA under the leadership of Acting Director Sandra Thompson for the agency’s work to align the regulatory capital of CRT with the economic capital of such transactions. We hope this represents the start of increased and expanded programmatic issuance of CRT by the GSEs, thereby allowing private capital to assume credit risk and enabling the GSEs to fulfill their mission and purpose.”

Click here to read SFA’s white paper on CRT entitled “Economic Benefits of Credit Risk Transfer Transactions for GSEs.”