Arch takes part in Freddie Mac pilot scheme

Bermuda-based re/insurer Arch Capital Group is taking part in a new mortgage credit risk transfer pilot programme with Federal Home Loan Mortgage Corporation Freddie Mac.

The pilot scheme aims to attract “a diversified and robust capital base to the US housing market.”

Arch has committed to deliver mortgage risk transfer products that provide capacity to the US housing sector.

In order to do so, Arch has established a new Washington D.C.-based subsidiary, Arch MRT, which will insure Freddie Mac and transfer 100 percent of the risk assumed to a panel of diversified, well-capitalized, and highly-rated re/insurers that provide high quality collateral assets in trust. This arrangement encourages additional participants and capital to support first-loss exposure in mortgages. The panel of re/insurers will competitively bid to provide, over the long term, lower cost mortgage insurance for borrowers.

Arch remains committed to providing mortgage risk transfer solutions across many offerings such as primary mortgage insurance through Arch Mortgage Insurance Company, credit risk transfer transactions (CRT), MRT, and other forms of protection as the marketplace evolves.

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