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The Road Forward for Ginnie Mae

With the housing finance system experiencing a significant evolution, it’s an exciting time to be a part of Ginnie Mae. The agency is developing new programs, processes and technology to ensure that it remains a reliable source of capital for the government mortgage loan market and the many households who depend on it. We are taking steps to ensure that it is well positioned to take on new responsibilities, if asked, as this period of change continues.

In 2019, Ginnie Mae reported more than $450 billion in MBS issuances, lifting our total outstanding MBS to nearly $2.1 trillion and providing affordable housing finance to approximately 1.8 million households. Those numbers and the impact on homeowners across the country would not have been possible without the commitment of our Issuers, servicers, investors and other stakeholders.

Already in the first month of 2020, strong MBS issuance volume in January is picking up where 2019 left off. For the past five months, Ginnie Mae MBS issuance has exceeded $50 billion — the first time that has ever happened. This is a result of the combination of mortgage rates hovering around historic lows, lenders employing new technology and improved borrower marketing strategies.

We will continue to be vigilant about monitoring market data and Issuer performance and on guard against trends that could have negative implications for the Ginnie Mae MBS program. Loan prepayments, even at rapid levels, are not inherently problematic if they clearly relate to market conditions and reflect the ability of homeowners to improve their financial situation. In order to address lending practices that have unhealthy effects, Ginnie Mae and the Department of Veterans Affairs (VA) have taken several policy actions in recent years; we are currently evaluating the impact of these steps and will consider additional steps if they seem warranted.

Our embrace of new technology, such as Robotic Process Automation and digital mortgages, signals that Ginnie Mae is changing, even as important aspects of our business remain constant. As execution of our “Ginnie Mae 2020” agenda continues throughout the year, we will improve the way users access core applications and deliver single-family pools. Ginnie Mae will also publish new e-mortgage rules related to digital collateral in our MBS Guide this year, as well as initiate an accompanying policy program test. Looking further down the road, we have started to plot the path toward the transition to loan-level program functionality that we committed to in the Housing Finance Reform Plan from the Department of Housing and Urban Development (HUD).

Our attention to risk management remains firm as well, as we continue to refine our program to model the impact of stressed economic environments on the institutions whose performances we guarantee. We are also working on establishing program requirements about resolution planning to better equip us for large-scale institutional failures

Moving into 2020, the industry can be reassured that Ginnie Mae will continue pushing forward in our mission. Not only are we listening to our Issuers, servicers and investors and keeping an eye on managing risk to taxpayers, but we’re holding true to our goal of serving American homeowners and renters by being the most efficient conduit possible for the delivery of global capital.