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Ginnie Mae Mortgage-Backed Securities Issuance Approaches Milestone

Ginnie Mae MBSAccording to the to the latest update from the Government National Mortgage Association—otherwise known as Ginnie Mae—the organization’s total outstanding principal balance related to its mortgage-backed securities (MBS) hit $1.960 trillion in May 2018, edging closer to the $2 trillion mark.

Ginnie Mae is a wholly-owned government corporation that attracts global capital into the housing finance system to support homeownership for veterans and millions of homeowners throughout the country. Ginnie’s report reveals that MBS issuance thus far for Fiscal Year 2018 (FY 2018) stands at $286.338 billion, as of the end of May. The $1.960 trillion total outstanding principal balance as of May’s end was up from $1.830 trillion in May 2017.

Ginnie’s MBS issuance for May 2018 totaled slightly more than $35 billion, including $33.431 billion of Ginnie Mae II MBS and $1.890 billion of Ginnie Mae I MBS. That includes $1.746 billion of loans for multifamily housing. That overall total is up slightly from April’s total of $34 billion, which included $32.437 billion of Ginnie Mae II MBS and $1.631 billion of Ginnie Mae I MBS.

Per Ginnie’s statement, Ginnie Mae I MBS “are modified pass-through mortgage-backed securities on which registered holders receive separate principal and interest payments on each of their certificates.” Ginnie Mae I MBS include single-family, multifamily, manufactured home, and project construction loans.

Ginnie Mae II MBS “are modified pass-through mortgage-backed securities for which registered holders receive an aggregate principal and interest payment from a central paying agent. An issuer may participate in the Ginnie Mae II MBS either by issuing custom, single-issuer pools or through participation in the issuance of multiple-issuer pools, which combine loans with similar characteristics.”

There have been several noteworthy developments within Ginnie of late. Earlier this month, Ginnie issued an All Participants Memorandum (APM) announcing the implementation of changes to pooling eligibility requirements for Department of Veteran Affairs' (VA) insured or guaranteed mortgages under the "Loan Seasoning for Ginnie Mae Mortgage-Backed Securities," provision. These changes affect security issuances on or after June 1, 2018, but do not otherwise affect the guarantee or composition of MBS issued before that date. You can read more about the changes by clicking here.

In May, the White House announced that President Trump was nominating Michael R. Bright as the President of Ginnie. If confirmed, Bright would be the agency’s first permanent head since Ted Tozer stepped down in January 2017, wrapping up a seven-year tenure as head of Ginnie. Bright wouldn’t be new to Ginnie—he has served as Ginnie’s VP and COO since the middle of 2017. In that role, Bright manages Ginnie's portfolio of mortgage-backed securities. You can read more about Bright’s background and qualifications by clicking here.

About Author: David Wharton

David Wharton, Editor-in-Chief at the Five Star Institute, is a graduate of the University of Texas at Arlington, where he received his B.A. in English and minored in Journalism. Wharton has nearly 20 years' experience in journalism and previously worked at Thomson Reuters, a multinational mass media and information firm, as Associate Content Editor, focusing on producing media content related to tax and accounting principles and government rules and regulations for accounting professionals. Wharton has an extensive and diversified portfolio of freelance material, with published contributions in both online and print media publications. He can be reached at [email protected].

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