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50 DS News Government Progress Report k ey per sonnel Theodore W. Tozer President Gregory A. Keith SVP & Chief Risk Officer Office of Enterprise Risk Thomas R. Weakland SVP Office of Securities Operations John F. Getchis SVP Office of Capital Markets Mary K. Kinney EVP & COO Michael R. Drayne SVP Office of Issuer & Portfolio Management Barbara Cooper-Jones SVP Office of Enterprise Data & Technology Solutions STAFFING: Number of employees: 115 DS News Housing Score B+ BUSINESS SCOPE: Ginnie Mae does not issue, sell, or buy mortgage-backed securities, nor does it purchase mortgage loans. It simply guarantees the timely payment of principal and interest from approved issuers (such as mortgage bankers, savings and loans, and commercial banks) of qualifying loans such as those issued by the FHA and RHA. REGULATION AND OVERSIGHT: Unlike its cousins Freddie Mac and Fannie Mae, Ginnie Mae is not a publicly-traded company. It is a corporation wholly owned by the Department of Housing and Urban Development (HUD).All Ginnie Mae and FHA employees are HUD employees. MISSION » Ginnie Mae, formed in 1968 after splitting from Fannie Mae, was established to promote home ownership and affordable housing by channeling global capital into the nation's housing markets. » In 1970, Ginnie Mae created and issued the first mortgage-backed security (MBS) as a tool to bring funds from worldwide investors to the U.S. housing market. » The securities are collateralized by the cash flows from loans insured or guaranteed by the Federal Housing Administration (FHA), Department of Veterans Affairs Home Loan Program for Veterans (VA), Office of Public and Indian Housing (PIH), and the U.S. Department of Agriculture Rural Development (RD). » The Ginnie Mae guaranty is the only MBS guaranty backed by the U.S. Government. » The demand for Ginnie Mae securities provides a steady source of funding for government-backed loans. The securities enjoy strong pricing in the secondary market and favorable trading spreads. SUCCESSES » More than $21.66 billion in Ginnie Mae II single-family pools were issued in April; Ginnie Mae I single-family pools totaled nearly $449 million. In addition, Ginnie Mae issued nearly $1.66 billion in multifamily MBS in April. Issuance for the Ginnie Mae Home Equity Conversion Mortgage-Backed Securities (HMBS), included in Ginnie Mae II single-family pools, was $395 million. » Ginnie's effectiveness as a safety net for investors was seen after the Great Recession. According to the New York Times, 16 funds that invested in Ginnie's MBS returned an average of 3.35 percent in Q2 of 2009 and 8.47 percent in the 12 months through June 2010. » Ginnie's guarantee had investors pour $5.8 billion into the 16 funds in 2008 and an additional $10.4 billion in 2009. According to Morningstar, the influx reversed five years of net outflows between 2003 and 2007. OPPORTUNITIES/ISSUES » Despite successes, the GAO found in 2012 that Ginnie Mae had yet to fully implement several planned initiatives to enhance its risk-management processes. » The GAO blamed the shortcoming on a lack of staff, an over-reliance on contractors, and the need for modernized information systems. GAO acknowledged Ginnie's role in the single-family mortgage market from 2010 and 2011, but recommended that Ginnie update its systems and staff to cope with the influx of money. According to GAO, Ginnie has yet to implement acceptable internal processes. » Ginnie Mae has halted transfer of servicing rights from Bank of America to a non-bank servicer upon discovery that the bank is missing documents. Ginnie is assessing the extent of the problem. » As a result, Ginnie has postponed the sale of mortgage servicing rights and made inquiries of other servicers, including J.P. Morgan Chase ($157 billion) and Wells Fargo ($420 billion). » If large numbers of documents are missing, the consequences of Ginnie Mae taking inventory could be large. Servicers would have to bear the costs of losses and legal issues, and the missing documents could bring repercussions from federal law enforcement. $23.32B MBS issued in April 2014 $629M net profit in FY 2013 $460B MBS issued in FY 2013 $1.5T current outstanding GNMA securities $30B total P&I paid to investors Ginnie Mae (GMNA) | CORPORATE HEADQUARTERS: Washington, D.C. $23.32 BILLION $629 MILLION $460 BILLION $1.5 TRILLION $30 BILLION

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