CRT Quarterly Webcast October 2021
Macro Environment Overview
- 2021 economic growth forecasts have been moderately revised down due to Delta variant concerns, but still very robust.
- Home price appreciation continues to rise with another 5.3% in growth forecasted for 2022, which is affecting affordability.
- Homes available for sale continue to be at historically low levels with new supply coming in at the high-end and building material cost increases being a factor.
- As the 30-year fixed-rate mortgage climbs back up, the market is expected to transition from predominately refinances to more purchases.
- First-time homebuyer purchases are at a 20-year high, fueled by the millennial generation – the largest cohort of Americans.
CRT Program and Performance Update
- STACR structure changes in Q3 included moving to a 20-year final maturity and a 5-year early redemption call, as well as modification protection for Freddie Mac.
- Freddie Mac issued its first Tender Offer for eight STACR CUSIPs to retire $1.3 billion in outstanding STACR protection, which was well received by the market.
- The ACIS share of 2021 issuances is higher than previous years at 45%, due to separating the ACIS transactions from STACR and accelerating their timelines.
- Freddie Mac CRT maintains broad participation that is always available on capitalmarkets.freddiemac.com/crt/clarity.
- Overall loss rates continue to be very low – an average of 0.3 bps of loss per transaction, with approximately 20% of transactions having no losses at all.
ACIS and the (Re)insurance Market
- ACIS Standalone (SAP) transactions began in March 2021 to help Freddie Mac meet risk management objectives, resulting in ACIS’s largest year to date.
- In 2022 SAP will evolve to SPH (high-LTV series) and SPL (low-LTV series) and to incorporate 15 and 30-year transactions.
- Through the course of the pandemic Freddie Mac remained active and maintained support from (re)insurers.
- Underwriting during the pandemic produced a very strong credit profile, with FICO scores historically high and debt-to-income historically low.
- Freddie Mac’s tools for disaster response and mitigating overall credit losses have resulted in declining serious delinquency and forbearance rates.
Freddie Mac Single-Family October 2021 CRT Quarterly Update
This recording may contain forward-looking statements. Forward-looking statements involve known and unknown risks and uncertainties, some of which are beyond the company's control. Management's expectations for the company's future necessarily involve a number of assumptions, judgments and estimates, and various factors could cause actual results to differ materially from the expectations expressed in these and other forward-looking statements. The company undertakes no obligation to update forward-looking statements it makes to reflect events or circumstances occurring after the date of this press release.
The financial and other information contained in this recording are only as of the dates stated or shown. The information could be out of date and no longer accurate. Freddie Mac undertakes no obligation, and disclaims any duty, to update any of the information in those documents.