Press today provides more insight into the Freddie/Arch deal we assessed yesterday in a detailed report. It indicates that Arch through a new mortgage risk transfer (MRT) subsidiary will transfer all of the risk in this new bulk transaction to a panel of reinsurers it describes as diversified, well-capitalized, and highly-rated – its own reinsurance affiliate surely included if their pricing is competitive. Arch MRT will collect a fee for channeling the risk and the winning reinsurers will collateralize their risk positions in trust accounts.
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