The CRT Crackdown Continues
As we noted yesterday in our initial assessment of FHFA’s annual CRT report, its assessment of the critical 2020-21 period shows an unbending determination to quash all but the best-capitalized credit-risk transfers no matter the pressure from Congress and other quarters to relent on grounds that risk transfers reduce GSE risk and thus spur recapitalization and privatization.  Insurance/reinsurance deals face the toughest challenges to continuing without significant structural realignment in transaction structures and GSE-risk mitigation.