FHFA Allows More Time For Feedback On Credit Risk Transfer Policies

Posted by Patrick Barnard on August 10, 2016 No Comments
Categories : Residential Mortgage

The Federal Housing Finance Agency (FHFA) has extended the period for industry feedback on its credit risk transfer policies by an additional 45 days.

Previously, the deadline for comments was Aug. 29, 60 days after the request for input (RFI) was published – however, that has been extended to Oct. 13 so that the agency can collect more feedback.

The FHFA is extending the comment period in light of requests from stakeholders for more time to evaluate the information and questions raised in the RFI.

In June, the FHFA issued its Single-Family Credit Risk Transfer Progress Report, which provides an overview of how the government-sponsored enterprises (GSEs) share credit risk with the private sector through primary mortgage insurance and through credit risk transfer transactions. It also details the status and volume of credit risk transfers through year-end 2015. The report also discusses different transaction structures and investor participation in this market and includes an examination of the cost of credit risk transfer transactions to the GSEs.

In addition, it put out the RFI, which lays out the FHFA’s principles of credit risk transfer. It seeks feedback from stakeholders on proposals to adopt additional front-end structures, such as a deeper mortgage insurance structure, as well as on other credit risk transfer policy issues.

“The Credit Risk Transfer Progress Report demonstrates transparency and documents that there has been a great deal of progress in the credit risk transfer market in a short period of time, even though the market is still relatively young,” says Mel Watt, director of the FHFA, in a release issued in June. “The request for input demonstrates our commitment to build upon the progress and expand the array of credit risk transfer products. Feedback from stakeholders is critical as we explore additional ways to enhance these programs and expand the investor base.”

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