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Ginnie In Brief

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by Omar Bouaichi | 1/16/2020

The mortgage finance system is always evolving, with participants continually searching for new, more efficient ways to do business, and make homeownership affordable and rental housing available to more families. As the largest source of capital for low- and moderate-income families and veteran homebuyers, it’s Ginnie Mae’s responsibility to stay abreast of market and business process innovations in order to successfully lead the industry to be more forward-thinking and adaptive. That responsibility is what led Ginnie Mae to launch its Innovation Lab in 2019.

Ginnie Mae’s Innovation Lab was created as a tool to support the evolution of programs, products and services that relate to our participation in the mortgage finance industry. A more robust innovative function will allow Ginnie Mae to systematize innovation across the enterprise, helping to bring more high-impact solutions to life in a more proactive manner.

This is accomplished by providing an isolated facility to intake, experiment and scale new emerging technologies to conduct “Greenfield Projects” and evaluate solutions for further investment, all with the ultimate goal of solving Ginnie Mae’s most pressing and challenging business needs. Examples of innovation opportunities include the use of cloud technology, robotic process automation (RPA), DevSecOps, artificial intelligence and machine learning, and predictive analytics and cognitive search.

It is important to note that innovation labs work varies, as industries and companies are trying to accomplish different goals and operate in different environments. At Ginnie Mae, our lab will focus specifically on bringing cutting-edge industry solutions and fostering a culture of innovation amongst our employees.

Ginnie Mae Innovation Lab matches the work of other companies committed to bringing in technology to make business more efficient. Most observers trace this approach back to Lockheed’s fabled “Skunkworks,” and have heard of this strategy being deployed in private sector companies, with little awareness of it being applied in the public sector. The public sector is very active, however, especially at the federal and GSE level, with USAID, NASA’s Solve Program, AFWERX at the Air Force, and the VA Center for Innovation as a examples of established innovation labs or teams.

Establishing an Innovation Lab is not without challenges, either in the public or private sectors. One of the most difficult aspects is convincing leadership that the lab will be additive to their programs as a service provider to help the organization find modern solutions to challenges. When Ginnie Mae launched its Innovation Lab, senior leadership knew that not every project would end in success. After all, by its very nature, innovation involves a degree of uncertainty and risk, so managing failure is an important element of the lab’s success. Ginnie Mae leadership pressed forward knowing that the most effective innovation programs take on a blend of transformational, homerun swing projects along with a more incremental, quick-win approach. Having a centralized innovation capability will allow Ginnie Mae to “fail” and move on from nonviable ideas more quickly and efficiently, while also making sure it’s capturing and consolidating what it learns from unsuccessful efforts so that it can use these insights moving forward.

Ginnie Mae leadership sees the inherent value of the Innovation Lab and strongly believes that the lab will see greater investment as Ginnie Mae advances its modernization, transformation and next-generation programs.

While leadership support is essential, staff buy-in is critical, too. Ginnie Mae structured the lab in such a way to make sure employees at all levels have the opportunity and resources to help them innovate; part of this will be accomplished through the launch of prize challenges and using the Lab space to test solutions with actual Ginnie employees. Moreover, leadership believes the Innovation Lab will enable the growth and development of talent across the organization.

As we all enter a new decade, Ginnie Mae is entering an exciting phase of its technology modernization with the Innovation Lab project. We have strong and reasonable expectations for the effort and are confident that the investment of staff and money will grow our mission of making the most efficient secondary mortgage market possible on behalf of government mortgage borrowers and American taxpayers.

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by Ginnie Mae | 12/6/2019

Ginnie Mae’s current position in fixed-income markets is vastly different than it was a decade ago. Our outstanding mortgage-backed securities (MBS) have grown steadily over the past ten years as the agency has fulfilled its mission to support the government-guaranteed mortgage market by attracting broad investor support for the government-guaranteed MBS product. Consider the numbers: Over the past decade, the value of Ginnie Mae’s outstanding MBS more than doubled from $888 billion at the end of fiscal year 2009 to $2.1 trillion at the end of fiscal year 2019.

The volume increase in outstanding MBS reflects an expansion of the portion guaranteed by the Department of Veterans Affairs (VA). The share of VA mortgages in new Ginnie Mae MBS has increased sharply since the housing crisis, from more than 16% in 2009 to 42% in 2019.

Ginnie Mae is committed to maintaining a strong MBS program built on a foundation of flexibility and reliability in order to meet the secondary market needs of the Issuers responsible for loans to veterans under the VA program. Recent policy changes regarding eligibility for VA mortgages pooled into our securities underscore our commitment to providing a liquid and efficient MBS product for lenders and investors that protects veterans’ home equity while also minimizing risks to taxpayers.

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by Ginnie Mae | 10/16/2019

Ginnie Mae’s data processing operations manage millions of data records each month, including the information that enables the flow of billions of dollars in principal and interest payments to investors around the world. To keep this enormous task running as smoothly and efficiently as possible, Ginnie Mae is investing in the development of artificial intelligence (AI) capabilities led by teams within the agency’s Office of Securities Operations and Office of Enterprise Data and Technology Solutions.

These efforts align with the Presidential order on AI from earlier this year, which serves as the basis for a whole-of-government strategy to tap private sector innovation in support of government program excellence.

AI encompasses a range of applications, processes and technologies. At Ginnie Mae, robotic process automation (RPA) is the first type of AI that we have deployed. Despite “robotic” as part of its name, RPA does not actually involve robots or other physical manipulative assets; RPA uses software to replicate repetitive human tasks such as the collection and analysis of data. (see Figure 1)

 

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Figure 1

In the second half of 2019, Ginnie Mae completed two RPA projects, or bots. The first is designed to collect and organize data related to the London Inter-bank Offered Rate (LIBOR), the principal index for the majority of adjustable rate mortgage-backed securities. The second bot assists staff within the agency’s Chief Financial Officer division to manage and report key information into the Ginnie Mae general ledger. Both bots free our staff to work on more value-added tasks, increasing the overall efficiency of the agency.

Although RPA is an excellent tool for increasing the efficiency of repeatable processes, it has also been important to recognize that not every repeatable process is the same. For example, research shows that RPA is best applied to processes that use structured and accessible data sources, such as the publicly available data on LIBOR or in-house financial statement data. RPA can also be used with unstructured data with a clear rules-based protocol for data manipulation. However, any break from the rules could cause an exception, or breakdown, that would require staff intervention, ultimately rendering the process ineffective.

As Ginnie Mae moves forward with its strategic and technology modernization plans, the agency intends to expand the number of RPA processes deployed and implement more sophisticated AI functions, such as machine learning, where appropriate.

Each phase of our modernization strategy will be governed by what is fiscally sound and secure. Our plan is to leverage capabilities of the private sector, as defined in the aforementioned Presidential order, as well as adopt or develop capabilities in partnership with leading-edge firms that advance our technological infrastructure. This strategy will effectively meet the changing needs of a sophisticated and nimble mortgage finance market, while keeping true to our mission to protect taxpayers and provide a robust secondary mortgage market for government home loans.

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by John T. Daugherty | 9/13/2019

Over the next several months, Ginnie Mae’s technology innovation will continue ramping up to meet the needs of the industry we serve. We’ve long understood that having the strongest possible technology platform is essential to handle our increasing volume — now at over $2 trillion of MBS outstanding.

In the coming months, we’re rolling out a number of new initiatives to benefit our industry partners:

  • MyGinnieMae Portal: Launching this year, this next-generation platform for stakeholders will provide a full-service solution to accessing our business applications in one secure place.
  • Centralized Help Desk: In 2020, we are looking to consolidate our existing 1-800 numbers into a single Help Desk that will better manage and organize inquiries based on their urgency and complexity. An improved documentation and classification system will also allow Ginnie Mae to identify areas of reoccurring need and performance improvements.
  • Single-Family Pool Delivery Module: Improving how we manage and align our data collection is an important aspect of our modernization efforts, especially given the industry’s ongoing expansion of digital mortgage issuance. With this new module, which will be launched as a pilot in the next few months, we aim to assist Issuers in delivering single-family pools, as well as to adapt to innovations within our industry.

These technology and systems innovations are being put into effect in accordance with our Ginnie Mae 2020 initiative we announced in June 2018.

At Ginnie Mae, the future is always just around the corner, and the implementation of these new services and platforms are just the latest elements in our ongoing technology upgrade. We’re very excited about what the future holds.

2019 Ginnie Mae Summit Opens Door for Continued Conversation
by Maren Kasper | 9/3/2019

At the 2019 Ginnie Mae Summit, Issuers, investors and industry participants convened to discuss topics ranging from our modernization efforts, to our recent efforts to mitigate counterparty risk, to broader topics, such as the general outlook of mortgage-backed securities. These are important conversations to be had – and it is not often that the mortgage industry gathers in one place for discourse about the future of the industry.

Our goal for the Summit was not just to engage in discussion for the two days of the event, but to start conversations that would be continued for years to come. We look forward to continuing the discussion at the MBA Annual this October and other upcoming events.

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Last Modified: 11/26/2019 1:21 PM