The CRT program that Fannie Mae and Freddie Mac run are materially the same structure just using mortgages as collateral.
They offload the credit risk portion to private investors. It’s a bit uglier with mortgages and very expensive for the issuers (thus expensive for tax payers) relative to the risk.
The CRT program that Fannie Mae and Freddie Mac run are materially the same structure just using mortgages as collateral.
They offload the credit risk portion to private investors. It’s a bit uglier with mortgages and very expensive for the issuers (thus expensive for tax payers) relative to the risk.
Totally - financial innovation is often just the last cycle’s ideas recycled for the new moment.