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Looking Ahead at Ginnie Mae
by Seth D. Appleton | 11/30/2020
When Secretary Carson asked me to lead Ginnie Mae in October of 2019, I could have never predicted the year to come. You may recall I was adamant that my appointment represented a change in personnel, not a change in policy and that Ginnie would continue to focus on its core principles of maintaining a liquid and attractive security, modernizing our platform, and operating a fiscally sound program. In shorthand, we would continue following the roadmap laid out in the Ginnie Mae 2020 plan. To a large degree we successfully did that. But it wasn’t the only thing we did. The COVID-19 pandemic changed the way we worked and the uncertainty it presented in the housing market caused us to reorder, and in some cases double down on, some key long-term strategic priorities. From a top line perspective, Ginnie Mae’s previous record for MBS issuance was $505 billion; in Fiscal Year 2020, we issued $748 billion in MBS without a hitch, proving for the world that our platform truly is volume agnostic. And with this record volume, we were able to help 2.8 million American households access homeownership and affordable rental housing, through our support of the FHA, VA, USDA, and PIH mortgage loan insurance and guarantee programs. March was a turning point in the year. With forbearances relating to the pandemic spreading, Ginnie Mae took quick and decisive action to support the housing market by designing and deploying a last resort liquidity facility, the Pass-Through Assistance Program, in record time. While utilization has not been high, it reassured the entire housing finance ecosystem that the market would be able to continue to function. It was around this time that we also made the decision to accelerate the launch of our Digital Collateral pilot allowing for the use of eNotes in Ginnie securitizations, as the importance of moving away from manual, paper-based processes became more and more evident. Meanwhile, we continued our focus on facilitating the entry of additional capital into the system in support of mortgage servicing rights through enhancements to our acknowledgement agreement and most significantly the approval of advance financing in the GMSR structure. And we conducted issuer stress testing exercises and continued our work supporting prudential standards around capital, liquidity, and leverage, as well as resolution planning. We improved the way we interface with program participants through the MyGinnieMae portal, which is now the single gateway to all Ginnie systems, applications, and resources and provides not only enhanced efficiency, but also enhanced security for our business partners. With the impending retirement of LIBOR, Ginnie Mae took important steps to end the use of it as a reference rate for adjustable rate products and established a plan to transition to more reliable rates in the future in order to minimize any market disruption. And just last week, Ginnie Mae received an unmodified opinion of its financials, the first time that Ginnie Mae has received a clean audit in seven years, which was an all hands-on deck effort. The accomplishments noted above would have been a lot of work even in a normal year. After all, running the railroad of a $2.1 trillion government corporation is complicated business in the best of times. However, the Ginnie Mae team managed to pull all of this off while operating in a remote environment. That is a testament to the talented team members at Ginnie Mae who pour themselves into their work each and every day with dedication, knowledge, and professionalism. As a result of their work, Ginnie Mae excelled, and, in doing so, provided housing opportunities for millions of American families, modernized the program, mitigated risks to taxpayers, and provided stability and liquidity to the housing market. So, as my time at Ginnie Mae concludes, I want to thank the staff of Ginnie Mae for their service and work during this unprecedented year. I also want to thank our issuers and investors for their support of homeownership and affordable rental housing. It is truly a team effort and the results would not have been possible without the hard work of all involved.
Ginnie in Brief Contributors
Laticia Jefferson
Richard Perrelli
Barbara Cooper-Jones
Regina Chase
Angel Hernandez
Alven Lam
Eric Blankenstein
Seth D. Appleton
Omar Bouaichi
John T. Daugherty
John F. Getchis
Roy Hormuth
Tamara Togans
Maren Kasper
Gregory A. Keith
Michael Drayne
Ginnie Mae
Michael R. Bright
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Last Modified: 3/23/2021 10:16 AM