Newsroom

April 28, 2014 – Freddie Mac on Thursday said it acquired insurance policies that cover up to a combined maximum of $269.5 million of losses for credit risk associated with single-family loans and that this will reduce taxpayers' exposure to mortgage losses.

The insurance policies are underwritten by a group of "well-capitalized and established insurers and reinsurers," Freddie Mac's press statement said. The policies were obtained under the company's Agency Credit Insurance Structure.

"We have a good start on our goal to provide multiple avenues for sharing mortgage credit risk with a diverse spectrum of private investors," said Kevin Palmer, vice president of Single-Family strategic credit costing and structuring for Freddie Mac.

In March, a new analysis showed Freddie Mac, with Fannie Mae, will pay the federal government nearly $180 billion over the next decade. The analysis is based on a look at White House budget projections that show both Fannie and Freddie remaining in operation and paying dividends to the government through 2024.

Tomorrow, the Senate Banking Committee is scheduled to begin consideration of the Johnson-Crapo housing finance reform draft (from committee Chairman Tim Johnson, D-S.D., and Ranking Member Mike Crapo, R-Idaho). The draft legislation addresses the future of Fannie and Freddie, among other things.

NAFCU is monitoring progress on housing finance reform legislation and working to ensure that any final reform measure includes government-guaranteed access for credit unions to the secondary mortgage market and loan pricing based on loan quality, not quantity.