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Ginnie Mae: Outstanding Principal Balance Edges Closer to $2 Trillion

Money Four BHGinnie Mae issued its latest Unpaid Principal Balance Summary this week, revealing that issuance of mortgage-backed securities (MBS) for the month of November 2017 totalled $39.13 billion. Ginnie’s total unpaid principal balance on MBS reached $1.904 trillion for the month, up from $1.894 trillion in October 2016.

Of Ginnie Mae’s $39.13 billion issuance for November, $37.215 billion was from the Ginnie Mae II MBS program and $1.986 billion was from Ginnie Mae I MBS. According to Ginnie, Ginnie Mae IIs “are modified pass-through mortgage-backed securities for which registered holders receive an aggregate principal and interest payment from a central paying agent.” Ginnie Mae Is “are modified pass-through mortgage-backed securities on which registered holders receive separate principal and interest payments on each of their certificates.”

All told, Ginnie Mae’s November MBS issuance “provided access to $37.734 billion in capital for single-family home loans and $1.467 billion for multi-family home loans.”

Total issuance thus far for the fiscal year is $79.341 billion. Ginnie’s total outstanding unpaid principal balance increased to $1.904 trillion in November 2017, which is up from $1.894 trillion in October 2016.

The Fed is expected to continue working to shrink the agency’s balance sheet, including MBS issued by Fannie Mae, Freddie Mac, and Ginnie Mae. However, some believe even more drastic changes are needed for the GSEs. Ginnie Mae Acting President Michael R. Bright spoke before the House Financial Services Committee on November 29, during which he discussed a paper he co-wrote with FHFA Acting Director Ed DeMarco in September 2016. It proposed reconstituting Fannie Mae and Freddie Mac as lender-owned mutuals and removing Ginnie Mae from the auspices of the Department of Housing and Urban Development, instead converting Ginnie into a standalone government corporation like the FDIC, “with authority over its own budget, hiring, and compensation.”

However, Bright also had praise for Ginnie. “At a very high level, the Ginnie Mae wrap works because we do two things effectively,” Bright said. “First, we are transparent about our rules and our processes with our investors. And second, we work hard to police our program.”

You can read all of Ginnie Mae’s Monthly Unpaid Balance Reports by clicking here.

About Author: David Wharton

David Wharton, Managing Editor 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 over 16 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. Wharton and his family currently reside in Arlington, Texas. He can be reached at David.Wharton@thefivestar.com.

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