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JPMorgan Leads ‘Next Little Big Thing’ in Mortgage-Risk Market

Nov. 13, 2019, 4:44 PM

JPMorgan Chase & Co. may be leading the next trend for banks seeking to shift risk away from their mortgage portfolios -- if regulators give Wall Street the green light.

The deal last month mimics the credit-risk transfer operations of Fannie Mae and Freddie Mac, using the form of a credit-linked note with payments dependent on those from mortgage loans held on the bank’s balance sheet. It offloaded a portion of the credit risk on about $750 million worth of mortgages and could “prove to be the next little big thing” if regulators allow such deals to continue, according ...