In 2017, hurricane season brought widespread destruction to parts of Texas and Florida, as well as Puerto Rico and the U.S. Virgin Islands, costing the nation an unprecedented $268 billion. As Ginnie Mae worked with lenders and their borrowers to deal with the aftermath, we recognized we needed to proactively manage the portfolios associated with affected areas. Many people, we knew, would likely be delinquent on their loans, and lenders would, as a result, come under financial stress. We couldn’t let that affect the stability of our mortgage-backed securities (MBS), which ultimately free up proceeds for lenders to make new mortgage loans available to first-time home buyers, low-income borrowers and veterans.
The solution we developed to manage our response to the 2017 hurricanes will have utility for years to come, enabling us to plan ahead for future disasters and ensuring we can protect our MBS program in any situation.
When we first began responding to the aftermath of the 2017 hurricane season, our task force of executives and key staff pored over dozens of reports as part of its decision-making. To optimize reporting, our data and IT teams built and deployed a dashboard that could give the organization timely information on disasters’ impact.
The dashboard allowed us to quickly assess the potential loss exposure within each portfolio and to understand which of our program participants were affected — and how much. We could see how much risk exposure came from the different loan-insuring agencies — the Federal Housing Administration (FHA), Veterans Affairs (VA) and Rural Housing Services (RHS). The dashboard also allowed us to use different scenarios to project potential delinquencies of impacted loans. Then we used lenders’ financial data to assess the potential financial stress on the lender, proactively monitor the risk of a lender default and make key decisions regarding disaster relief.
In other words, the Disaster Response and Relief Dashboard allows Ginnie Mae to get ahead of the curve, assess potential loss exposure and understand the magnitude of disasters’ impact on first-time home buyers, low-income borrowers and veterans. The dashboard is another step in the right direction as we continue to modernize our technology and services. In fact, IDG’S CIO and the CIO Executive Council recently named Ginnie Mae a recipient of the 2019 Digital Edge 50 Award, which honors organizations for executing digital transformation initiatives with significant business impact.
To ensure the tool’s year-round value, and not just during hurricane season, the dashboard also can forecast a disaster’s potential impact, in addition to providing post-disaster analysis. Users can define the impact area, simulate severity of impact, and understand immediate and potential long-term effects based on historical disaster data.
As Ginnie Mae continues to digitize systems, we are dedicated to improving user experience and easing access to our resources. We want to continue strengthening our business model, while making it easy for lenders to provide loans — and investors to have peace of mind — even in difficult times.
By working to get ahead of future hurricanes and natural disasters, Ginnie Mae is ensuring its place as a leader in the mortgage market and empowering the business to maintain the supply of low-cost capital for homeownership.