Summit Releases New White Paper on Credit Risk Transfer

Today, Summit Director Frank Vetrano released his newest white paper on credit risk transfers (CRTs) at the Federal Housing Administration (FHA). In the paper, “Will Risk Transfer Work at FHA?”, he answers key questions about CRTs.

Vetrano discusses how the success of Fannie Mae and Freddie Mac’s CRT programs has led policy makers to think about risk transfer more broadly across other government credit programs. Michael Bright, executive vice president and chief operating officer of the Government National Mortgage Association (Ginnie Mae), recently suggested that Ginnie Mae is open to a risk-transfer pilot that would have private capital absorb a portion of the losses on FHA loans securitized through the agency.

In his white paper, Vetrano discusses how this type of CRT would not be economically viable at FHA, and what other risk-transfer models may work for this agency.

Interested in reading the full paper? Click below to download “Will Risk Transfer Work at FHA?”