Credit risk transfers

Fannie Mae's first-quarter profits were enough for it to rebuild its minimum capital buffer and pay the Treasury Department dividend after being forced to take a draw during the previous fiscal period.

If Freddie Mac's credit-risk transfer activities continue to grow, mortgage lenders could eventually see a reduction in the guarantee fees they pay to the government-sponsored enterprise, according to CEO Donald Layton.

Fannie Mae's serious delinquency rate climbed to a high not seen since March 2017, but remained lower than it was 12 months prior.

Credit risk transfers have emerged as more than just a method for mitigating taxpayer exposure. They could be a key component of comprehensive housing finance reform.