The mortgage industry remains deeply uneasy with efforts by Fannie Mae, Freddie Mac and their regulator to experiment with front-end credit risk transfers.

Six trade groups sent a letter recently to the Federal Housing Finance Agency, backing its efforts to test various credit risk transfers, which are designed to attract private capital into the mortgage market and reduce taxpayer’s potential exposure to losses. The groups, including the American Bankers Association, Mortgage Bankers Association and the Financial Services Roundtable, argue that FHFA should continue to experiment with both front-end and back-end deals.

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