From the desk of Ted Tozer, President, Ginnie Mae:
Ginnie Mae closes its books on yet another successful fiscal year (FY), reporting $460 billion in issuance of mortgage-backed securities (MBS) for 2013 – the highest in our 45-year history. Nearly every year since inception, Ginnie Mae has earned profits for the U.S. Government. And 2013 was no exception. Ginnie Mae earned a net income of $628.4 million in FY 2013, up from $609.6 million in 2012. Consistency in generating profits demonstrates Ginnie Mae’s continued strength and stability in support of the secondary mortgage market and reaffirms the significant role we play in our nation’s housing finance system.
Other FY 2013 financial highlights include:
• Ginnie Mae reported total revenues of $1.225 billion, down just slightly from $1.246 billion in 2012. Ginnie Mae’s operations are self-financed through a variety of fees, which generated $870.9 million in program income – up from $779.4 million last year – as well as $98.7 million in interest income from U.S. Treasury securities. • Retained earnings increased to nearly $17 billion from $16.4 billion in FY 2012. Steady increase in earnings year over year provides Ginnie Mae a cushion against economic upheaval and shields American taxpayers from market instability. • Total assets increased to $25 billion in 2013, up from $23.7 billion last year.• Ginnie Mae increased its provision for losses to cover additional losses related to extended foreclosure timelines on our defaulted portfolios and still increased revenues over expenses, compared to last year.
With an outstanding MBS balance of $1.457 trillion at the end of FY 2013, Ginnie Mae’s production, this year alone, provided the necessary capital to finance home purchases, refinances and rental housing for approximately two million American households. Ginnie Mae’s MBS remains a liquid and attractive investment for both domestic and foreign investors. The Ginnie Mae guaranty, coupled with an expected rate of return higher than U.S. Government securities, helps to provide uninterrupted access to capital and liquidity for affordable rental and homeownership opportunities across the country.
Ginnie Mae manages its expenses well and deploys its capital wisely. Though we managed baseline expenses effectively, operating expenses increased to $128.4 million this year – up from $86 million in FY 2012 – primarily due to our investment in a multi-year effort to modernize technology and infrastructure to respond to an ever-evolving market. The modernization of our infrastructure will allow Ginnie Mae to continue its commitment to help our issuers to be successful by optimizing their Ginnie Mae experience. An integrated portfolio of strategic priorities and investments, this initiative will increase efficiency and allow us to sustain long-term business growth.
We are proud of our 2013 financial performance and look forward to what lies ahead in 2014. We are seeing signs of real recovery in the housing market. This is good news for the economy in general and Ginnie Mae in particular. Committed to building for the future, Ginnie Mae has a proven track record of evolving to meet the needs of the market and adapting to nearly any kind of economic condition. With each passing year, Ginnie Mae’s business model – a perfect public-private partnership – has been and continues to be a cornerstone of the U.S. housing finance system.