Share Save About Author: Seth Welborn Print This Post Don LaytonAfter instigating the first modern Credit Risk Transfer (CRT) in 2013, CRT has become a standard practice at the GSEs, but many seem to misunderstand their purpose and mission. In a series of papers authored by former Freddie Mac CEO and Harvard Joint Center for Housing Studies (JCHS) Senior Industry Fellow Don Layton, Layton attempts to explain the purpose and role of CRT. What specific issues do CRT address, and how successful have they been?In the first paper, titled Demystifying GSE Credit Risk Transfer: Part I – What Problems Are We Trying to Solve?, Layton begins at the 2008 financial crisis, and the beginning of conservatorship. With CRT, Layton notes, instability like in 2008 is less likely, and the system allows the mortgage system to operate more efficiently.“After that first transaction in 2013, it took just a few years for CRT to mature and become a core component of the reformed GSE business model, today putting about 70 percent of all new single-family mortgage credit risk into the hands of private capital,” said Layton. “This dramatically reduces the potential for the GSEs to become a source of systemic instability in the future, as they had become in 2008.”“CRT has become the linchpin for other improvements in the US system of housing finance,” Layton continues.Layton’s paper lists the major GSE challenges that he says CRT successfully addresses, including systematic risk, taxpayer exposure, and capital costs. A major question Layton asks is, “Can systemic risk be reduced?” According to his paper, the answer is yes, however, this takes time.”It’s not theory at this point, as ballpark one-quarter to one-third of the credit risk exposure (as measured by government formulae) of the entire single-family mortgage book of the two GSEs has already been sold off to CRT investors,” Layton says. “It will just take some years for the rollover of the mortgages to increase the systemic risk reduction to a much higher level, hopefully reaching 70%-plus by five or so years.”One of the GSE’s more recent CRT programs is Fannie Mae’s Connecticut Avenue Securities (CAS) transactions. According to Fannie Mae, the CAS issuer strategy works to build program in a sustainable way to promote liquidity. Similiarly, the GSEs are looking to expand liquidity through the Uniform Mortgage-Backed Security (UMBS), which launched in June 2019.The UMBS, according to Renee Schultz, SVP, Capital Markets, Fannie Mae, is “the result of close collaboration with FHFA, Freddie Mac, Common Securitization Solutions, and hundreds of housing finance stakeholders and we congratulate all involved on this achievement,” said Renee Schultz, SVP, Capital Markets, Fannie Mae in a statement. Data Provider Black Knight to Acquire Top of Mind 2 days ago Previous: Low-End Rents Prop Up Single-Family Rent Growth Next: Empire State Tax Changes Pose Difficulties for Residential Investors CAS CRT Fannie Mae Freddie Mac UMBS 2020-01-21 Seth Welborn Governmental Measures Target Expanded Access to Affordable Housing 2 days ago The Best Markets For Residential Property Investors 2 days ago Home / Daily Dose / Former Freddie Mac CEO on Limiting GSE Risk Exposure Former Freddie Mac CEO on Limiting GSE Risk Exposure Servicers Navigate the Post-Pandemic World 2 days ago Sign up for DS News Daily Demand Propels Home Prices Upward 2 days ago January 21, 2020 2,575 Views in Daily Dose, Featured, Government, News, Secondary Market Demand Propels Home Prices Upward 2 days ago Governmental Measures Target Expanded Access to Affordable Housing 2 days ago Servicers Navigate the Post-Pandemic World 2 days ago Tagged with: CAS CRT Fannie Mae Freddie Mac UMBS Seth Welborn is a Reporter for DS News and MReport. A graduate of Harding University, he has covered numerous topics across the real estate and default servicing industries. Additionally, he has written B2B marketing copy for Dallas-based companies such as AT&T. An East Texas Native, he also works part-time as a photographer. Related Articles The Best Markets For Residential Property Investors 2 days ago Data Provider Black Knight to Acquire Top of Mind 2 days ago Subscribe The Week Ahead: Nearing the Forbearance Exit 2 days ago
Last night, The Disco Biscuits opened up the first of four nights for their annual Colorado Bisco Inferno run. At the beginning of each summer, fans near and far travel to see the Biscuits party, generally for multiple nights at Denver’s Ogden Theatre ahead of a Red Rocks Amphitheatre headlining show. This Sunday, The Disco Biscuits have the pleasure of playing one of the country’s favorite open-air amphitheaters, with Spafford and Organ Freeman taking on the opening duties. If last night’s opening show was any indication, fans are in for a very special four nights of music—full of lasers, laughter, and late nights.The Disco Biscuits’ opening set at the Ogden Theatre last night kicked off with a high energy “7-11”, with lighting maestro Johnny R. Goode laying down a concoction of what he does best: lasers and strobe lights (maybe some martinis too). With guitarist Jon “Barber” Guttwillig leading the way on vocals, the four veterans took the jam into deep territory, highlighted by an extended Aron Magner solo on the keys. Up next was a beautiful cover of LCD Soundsystem’s “Home”. The Disco Biscuits did the Brooklyn rockstars justice, letting the bubbly number fizzle into a deep experimental groove, with Allen Aucoin laying down a mean beat behind the kit.A killer “Sweating Bullets” was next, last played over the Biscuits New Year’s Eve run at New York City’s PlayStation Theatre in Times Square. The Philly natives were locked and loaded, dialing things in with their home-away-from-home crowd. With rainbow lasers bouncing and Marc Brownstein’s bass shaking the room, The Disco Biscuits took things deep before dropping into “Bernstein and Chasnoff”. As an amazing first set came to a close, fans got a chance to have a quick breath of fresh air before the jamtronica titans were back for more.Set two picked up right where set one left off, as they opened with a Biscuits favorite, “M.E.M.P.H.I.S.”. The heavy number was a perfect selection to send the night into astral territory, as the rhythm section of Brownstein and Aucoin locked things in. Barber has been playing phenomenally over the past year, and last night was no exception. The guitar wizard brought it all home, before diving into an inverted “Humuhumunukunukuapua’a”.The quartet was feeling extremely loose after destroying Asheville, North Carolina, last weekend. The band’s decision to play a run the weekend prior to Inferno was a wise one, with no rust or dust in clear sight. Up next was “I Feel Love”, a cover of Donna Summers‘ 1977 disco hit, before throwing down an inverted “And The Ladies Were The Rest Of The Night”. Riding a high, set two came to a close with “Pilin’ It Higher”, as Barber laid down some beautiful and patient licks, allowing the jam to evolve into a beast that could not be contained.Following a nearly three-and-a-half-hour throw down, the band came back out to encore “Magellan Reprise”. The Disco Biscuits’ four-night run has just begun, and things are looking good for Memorial Day weekend in colorful Colorado.Setlist: The Disco Biscuits | Ogden Theatre | Denver, CO | 5/24/2018Set I: 7-11-> Home (LCD Soundsystem)-> Sweating Bullets, Bernstein & ChasnoffSet II: M.E.M.P.H.I.S.-> Humuhumunukunukuapua’a (inverted)-> I Feel Love-> And the Ladies Were the Rest of the Night (inverted)-> Pilin’ it HigherEncore: Magellan RepriseFull Show Video[Video: The Disco Biscuits]You can view a full gallery of photos from the show below via photographer Andrew Rios.