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41 » VISIT US ONLINE @ DSNEWS.COM DEMAND FOR FANNIE MAE CIRT— "AMONG THE STRONGEST EVER" Fannie Mae recently announced that it has completed its sixth Credit Insurance Risk Transfer transaction of 2019, covering loans previously acquired by the company. e deal, CIRT 2019-3, covers $14.8 billion in unpaid principal balance (UPB) of 21-year to 30-year original term fixed-rate loans. According to Fannie Mae, this transaction is part of the GSE's effort to reduce taxpayer risk by increasing the role of private capital in the mortgage market. "With 21 insurers and reinsurers providing coverage, demand for this transaction was among the strongest we've ever had," said Rob Schaefer, VP for Credit Enhancement Strategy & Management, Fannie Mae. "With this deal, the CIRT program reached an important milestone, having committed approximately $10 billion of risk transfer since the program's first transaction in 2014. e successful growth and evolution of CIRT is founded on a partnership between Fannie Mae and participating insurers and reinsurers, reinforced by the transparency of the CIRT program and our leadership in managing single-family residential credit risk." With CIRT 2019-3, which became effective August 1, 2019, Fannie Mae will retain risk for the first 40 basis points of loss on a $14.8 billion pool of single-family loans with loan-to-value ratios greater than 60 percent and less than or equal to 80 percent. If the $59 million retention layer is exhausted, reinsurers will cover the next 325 basis points of loss on the pool, up to a maximum coverage of approximately $479 million. Coverage for these deals is provided based upon actual losses for a term of 12.5 years. Depending on the paydown of the insured pool and the principal amount of insured loans that become seriously delinquent, the aggregate coverage amount may be reduced at the one-year anniversary and each month thereafter. e coverage on each deal may be canceled by Fannie Mae at any time on or after the five-year anniversary of the effective date by paying a cancellation fee. GINNIE MAE HITS $32B IN PLATINUM SECURITIES Ginnie Mae announced that investors purchased a record $32 billion of Platinum Securities spread across 217 pools in the fiscal year that ended September 30. Platinum Securities volume in fiscal year 2018 was approximately $20 billion. Ginnie Mae Platinum Securities are issued through the Ginnie Mae Multiclass Securities Program and, according to Ginnie Mae, "provide investors of mortgage-backed securities (MBS) with greater market and operating efficiencies." Investors who hold multiple pools of MBS can combine new or existing MBS into a single Ginnie Mae Platinum Certificate. Once a Ginnie Mae Platinum Certificate has been created, it can be used in structured finance transactions, repurchase transactions and general trading. "e record volume caps a strong year for the Ginnie Mae Platinum program," Ginnie Mae said in a statement. In April, Ginnie Mae introduced a Platinum product for Home Equity Conversion Mortgages (HECMs), known as HMBS, part of the modernization of Ginnie Mae's Platinum Securities Program. Investors can create Platinum products using fixed-rate MBS (15- and 30-year mortgages); Weighted Average Coupon (WAC) Adjustable Rate Mortgage (ARM) and Jumbo Only Fixed mortgages. "e market adoption of the modernized process for Platinum products has been strong: prior to modernization, fiscal year 2017 production of Platinum securities with fixed-rate collateral was only $7.88 billion," Ginnie Mae noted. "Following modernization and automation inside the new MyGinnieMae portal, volume grew to more than $20 billion in fiscal year 2018." "e results this year clearly demonstrate that our Platinum program modernization efforts are aligned with the needs of investors," said John Daugherty, SVP, Office of Securities Operations. "Making it simpler for investors to manage their portfolio of Ginnie Mae securities, while enhancing the liquidity of their Ginnie Mae investments, supports our mission to foster a strong secondary mortgage market for government mortgage loans. We're helping borrowers across the U.S. obtain the lowest mortgage rates an efficient market can offer."

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