There's another way for lenders to "de-risk" loans before selling them to Fannie and Freddie: by keeping this risk on their own books, at least initially. To date, only a handful of mortgage lenders have engaged in such transactions. Two real estate investment trusts, Redwood and Penny Mac, have sold loans to Fannie in which they retained the first-loss position. Redwood absorbed the first 1% of losses in one such deal and Penny Mac the first 3% or so in another, both in 2014. Two other lenders have sold loans to Fannie via transactions in which they absorbed the first 4% to 5% of the risk, but later sold this exposure to a third party. JP Morgan was the first to do so, in 2014; both Wells Fargo and JP Morgan did deals this year.