In the biggest test so far of efforts to get private investors to share more of the risk of mortgage defaults with Fannie Mae and Freddie Mac, Fannie Mae will sell $1.6 billion in risk-sharing certificates this week that are tied to $61 billion in home loans — including $14 billion in mortgages made to borrowers who made down payments of between 3 and 20 percent.

Demand for the risk-sharing certificates is so great that Fannie Mae will pay lower yields to investors than it had anticipated, the Wall Street Journal reports.

The sale is in line with efforts by the mortgage giants’ new federal regulator to expand access to credit in the mortgage market, the Journal reported. Last week the Federal Housing Finance Agency’s new director, Mel Watt, directed Fannie and Freddie to boost the amount of risk they share with private investors.

In his first public remarks since taking on his new role, Watt said FHFA expects Fannie and Freddie to triple the amount of “risk transfers” from $30 billion of unpaid principal balance transfers last year to approximately $90 billion this year. Source: Wall Street Journal via finance.yahoo.com.

Show Comments Hide Comments
Sign up for Inman’s Morning Headlines
What you need to know to start your day with all the latest industry developments
By submitting your email address, you agree to receive marketing emails from Inman.
Success!
Thank you for subscribing to Morning Headlines.
Back to top
×
Log in
If you created your account with Google or Facebook
Don't have an account?
Forgot your password?
No Problem

Simply enter the email address you used to create your account and click "Reset Password". You will receive additional instructions via email.

Forgot your username? If so please contact customer support at (510) 658-9252

Password Reset Confirmation

Password Reset Instructions have been sent to

Subscribe to The Weekender
Get the week's leading headlines delivered straight to your inbox.
Top headlines from around the real estate industry. Breaking news as it happens.
15 stories covering tech, special reports, video and opinion.
Unique features from hacker profiles to portal watch and video interviews.
Unique features from hacker profiles to portal watch and video interviews.
It looks like you’re already a Select Member!
To subscribe to exclusive newsletters, visit your email preferences in the account settings.
Up-to-the-minute news and interviews in your inbox, ticket discounts for Inman events and more
1-Step CheckoutPay with a credit card
By continuing, you agree to Inman’s Terms of Use and Privacy Policy.

You will be charged . Your subscription will automatically renew for on . For more details on our payment terms and how to cancel, click here.

Interested in a group subscription?
Finish setting up your subscription
×