Ginnie In Brief
|Deploying Robotic Process Automation at Ginnie Mae|
|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)
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.
|Take a Look Back at 2018 in Ginnie Mae’s Annual Report|
|by Ginnie Mae | 12/20/2018|
2018 capped a remarkable decade of growth for Ginnie Mae. We reached $2 trillion in outstanding mortgage-backed securities (MBS), which represents considerable growth from less than $427.6 billion in 2007. Our role in the mortgage market continued to grow, and in 2018 we served nearly 1.9 million American households, and celebrated our 50th anniversary of providing capital to the housing market to help more Americans achieve the goal of homeownership through government lending programs. In our 2018 Annual Report, we take a look back at our accomplishments in the past fiscal year. These include:
Growing our relationships with our largest investors, both long-time and newcomers. We have recognized the importance of finding new, dedicated investors across the globe. The top four countries investing in Ginnie Mae in 2018, based on estimated value of Ginnie Mae holdings among investors from those nations, were Taiwan, Japan, China and Ireland.
Focusing on the intersection of investor and borrower needs, while also protecting taxpayers. Our commitment to this mission led to our decision to sanction a small group of Issuers whose loan performance damaged the integrity of our securities and our ability to effectively serve American homeowners. We have not hesitated to police our program in order to provide the best possible mortgage rate to consumers and a market-predictable MBS to our investors. Monitoring the performance of our security is now part of the routine business of Ginnie Mae, and additional steps can be expected throughout the next year.
Strategically investing in technology and process redesign. Early in 2018, we successfully completed our first three waves of IT infrastructure migration from our pool processing agent to a government SmartCloud. During the year we also announced our commitment to modifying the MBS program to permit the inclusion of mortgages that exist only in digital form, an initiative that will be shaped into a pilot program in 2019. We will continue to invest in technology in the upcoming fiscal year, making enhancements outlined in our June 2018 white paper “Ginnie Mae 2020.”
Responding proactively to the fact that more and more of our Issuers are independent nonbank mortgage lenders. These groups are often efficient at mortgage servicing, but are not subject to federal safety and soundness regulations. This reality requires Ginnie Mae to focus on ensuring the strength and liquidity of our partners and the mortgage market that we serve. To that end, we evolved our approach to counterparty risk management in 2018, and we will take additional steps in 2019 and beyond.
As elected officials continue to debate how best to reform the broader U.S. housing market, Ginnie Mae has and will continue to provide insight on the relevant aspects of administering an explicit government guaranty. Meanwhile, in the new year we’ll continue to do our part to ensure that secondary market capital flows to a safe, liquid and accessible residential mortgage market.
Read Ginnie Mae’s 2018 Annual Report.
|Modernizing the Ginnie Mae MBS Program and Platform|
|by Ginnie Mae | 12/10/2018|
To keep pace with the dynamic mortgage market, Ginnie Mae is committed to modernizing its technology in order to deliver a better and safer experience for all participants in the Ginnie Mae program. Advancements already underway to Ginnie Mae’s technology and systems are enabling us to more effectively securitize mortgages, disseminate data, increase efficiency and, ultimately, ensure the stability of Ginnie Mae’s MBS program. In the above video, Ginnie Mae’s EVP and COO Michael Bright and EVP Maren Kasper outline the roadmap for becoming the industry leader in technology and innovation.
To further your understanding of how Ginnie Mae is modernizing its platform, read Pillar I of the Ginnie Mae 2020 report.
|A decade of growth at Ginnie Mae|
|by Ginnie Mae | 10/5/2018|
Millions of low- and moderate-income, rural, urban and veteran homeowners rely on loans made possible by Ginnie Mae’s mortgage-backed securities (MBS). Our robust and reliable process for ensuring the timely payment of principal and interest to security holders has enabled us to never miss a payment since our founding in 1968. And over the past 10 years, that business model has been one reason for the tremendous growth we’ve experienced.
The charts below illustrate how momentous the past decade has been for Ginnie Mae.
|Ginnie Mae’s Multifamily MBS helps keep rental housing affordable|
|by Ginnie Mae | 9/13/2018|
All segments of the U.S. housing market are going strong, including the multifamily sector where construction of new apartments hovers near a recent peak. However, many of the new apartments being built are too expensive for low- and moderate-income renters. That’s why it’s important for Ginnie Mae’s multifamily MBS program to continue its role as a source of mortgage capital for developers and owners. These groups are building new and refinancing existing apartments that are home to low- and moderate-income families.
While primarily known for financing homeownership, Ginnie Mae’s MBS programs also support mortgage lending for qualifying apartment buildings. For example, in August, $1.53 billion of Ginnie Mae MBS were issued to finance multifamily housing and more than $16.5 billion were issued for the fiscal year through August 31.
Ginnie Mae’s MBS guarantee works in tandem with mortgage insurance from the Federal Housing Administration to attract lenders and investors to the multifamily mortgage market. By working together, FHA and Ginnie Mae help lower the cost of mortgage loans to construct new or rehabilitate existing rental housing affordable for low- and moderate-income consumers. Those lower-cost mortgage loans lead to reduced construction and rehab costs and, ultimately, more affordable rents for families.
The need for affordable rental housing is great. According to data from the Joint Center for Housing Studies at Harvard University, nearly half of renters in the U.S are cost-burdened, meaning that their rent payments exceed 30 percent of their gross income.
For decades, Ginnie Mae has helped to finance affordable rental housing, and the cumulative extent of its efforts is significant. Since issuing its first multifamily MBS in 1971, Ginnie Mae has guaranteed more than $290 billion of multifamily MBS.
Because of participation in the Ginnie Mae multifamily MBS program from more than 60 large and small lenders across the U.S., families are able to afford quality rental housing.