Government National Mortgage Association

Government National Mortgage Association

Founded	1968
Area served	United States of America
Key people	Theodore W. Tozer (President) Nancy Corsiglia (Executive Vice President & Chief Operating Officer) John T. Daugherty (Senior Vice President of Securities Operations) Deborah A. Hernandez (Senior Leader of Transformation and Engagement) Tawanna Preston (Senior Vice President of Management Operations Keith Donzell (Senior Vice President & Chief Financial Officer) Michael R. Drayne (Senior Vice President of Issuer & Portfolio Management) John F. Getchis (Senior Vice President of Capital Markets) Barbara Cooper-Jones (Senior Vice President of Enterprise Data & Technology Solutions) Gregory A. Keith (Senior Vice President of Enterprise Risk & Chief Risk Officer)
Number of employees	140
Website	www.ginniemae.gov

The Government National Mortgage Association (GNMA), or Ginnie Mae, was established in the United States in 1968 to promote home ownership. As a wholly owned government corporation within the Department of Housing and Urban Development (HUD), Ginnie Mae’s mission is to expand affordable housing finance in America by linking domestic and global capital to the nation's housing finance markets, providing market liquidity to federally sponsored mortgage lending programs.

The Ginnie Mae guarantee allows mortgage lenders to obtain a better price for their loans in the capital markets. Lenders then can use the proceeds to make new mortgage loans available to consumers. This also helps to lower financing costs and create opportunities for sustainable, affordable housing for families seeking home ownership.

History

In 1934, during the depths of the Great Depression, Congress responded to the crisis by passing the National Housing Act of 1934, which established the Federal Housing Administration (FHA). One of the principal objectives of the FHA was to increase the flow of capital to the housing markets by insuring private lenders against the risk of mortgage default. FHA also was tasked with chartering and regulating a national mortgage association that would buy and sell FHA-insured mortgages.

In 1938, Congress amended the act to create the Federal National Mortgage Association, more commonly known as "Fannie Mae", to help mortgage lenders gain further access to capital for mortgage loans.

The provisions of the act changed gradually over the years. It was not until 1968, however, in response to a perceived need to further broaden the capital base available for mortgages that the housing finance system began to resemble its current form. As part of the Housing and Urban Development Act of 1968, Congress partitioned Fannie Mae into two entities:

Fannie Mae, which was still originally restricted to purchasing FHA/VA mortgages (Fannie Mae was permitted to deal in conventional mortgages in 1970), and
Ginnie Mae, formerly the Government National Mortgage Association, which originally only provided insurance for bonds issued by FHA/VA mortgages in special affordable housing programs.

Today, Ginnie Mae securities are the only mortgage-backed securities that are backed by the "full faith and credit" guaranty of the United States government, although some have argued that Fannie Mae and Freddie Mac securities are de facto or "effective" beneficiaries of this guarantee after the US government rescued them from insolvency in 2008.^[1]

Business

Ginnie Mae guarantees the timely payment of principal and interest payments on residential mortgage-backed securities (MBS) to institutional investors worldwide. These securities, or “pools” of mortgage loans, are used as collateral for the issuance of securities on Wall Street. MBS are commonly referred to as "pass-through" certificates because the principal and interest of the underlying loans is "passed through" to investors. Because of Ginnie Mae's financial backing, these MBS are particularly attractive to investors and, like other Agency MBS, are eligible to be traded in the "to-be-announced," or "TBA" market.^[2]

Ginnie Mae guarantees only securities backed by single-family and multifamily loans insured by government agencies, including the FHA, Department of Veterans Affairs, the Department of Housing and Urban Development’s Office of Public and Indian Housing and the Department of Agriculture’s Rural Development.

Ginnie Mae neither originates nor purchases mortgage loans. It does not purchase, sell, or issue securities. Accordingly, Ginnie Mae does not use derivatives to hedge and it does not carry long-term debt (or related outstanding securities liabilities) on its balance sheet. Instead, private lending institutions approved by Ginnie Mae originate eligible loans, pool them into securities, and issue the Ginnie Mae MBS. These institutions include geographically diverse mortgage companies, commercial banks, and thrifts of all sizes, as well as state housing finance agencies.

Role in the housing recovery

In 1970, Ginnie Mae became the first organization to create and guarantee MBS products and has continued to provide mortgage funds for homebuyers ever since. Even in uncertain times, investors are guaranteed payment of interest and principal, in full and on time. The benefits of this process are passed on to the lenders who can then make more mortgage loans at more affordable rates.

Government-sponsored enterprises and government-owned enterprises

Ginnie Mae is a wholly owned government corporation. Fannie Mae and Freddie Mac, on the other hand, are "government-sponsored enterprises" (GSEs), which are federally chartered corporations, but still privately owned by shareholders. In September 2008, the GSEs were placed under government conservatorship, effectively wiping out shareholders.

Ginnie Mae neither originates nor purchases mortgage loans nor buys, sells or issues securities in the U.S. capital markets. The credit risk on the mortgage collateral underlying its MB securities primarily resides with other insuring government agencies. Rather, Ginnie Mae is the guarantor of MBS issued by government-approved securities issuers who participate in Ginnie Mae’s program.

References

↑ Kopecki, Dawn. "Fannie, Freddie Have `Effective' Guarantee, FHFA Says (Update1)". October 23, 2008. bloomberg. Retrieved 15 May 2013.
↑ Lemke, Lins and Picard, Mortgage-Backed Securities, Chapters 2 and 4 (Thomson West, 2013 ed.).

External links

Ginnie Mae homepage

Agencies under the United States Department of Housing and Urban Development

Headquarters: Robert C. Weaver Federal Building Julian Castro, Secretary of Housing and Urban Development Nani Coloretti, Deputy Secretary of Housing and Urban Development

Secretary of Housing and Urban Development	Office of Small and Disadvantaged Business Utilization Office of HUD Administrative Law Judges Federal Housing Finance Agency Office of Departmental Equal Employment Opportunity

Deputy Secretary of Housing and Urban Development	Office of Community Planning and Development Office of Fair Housing and Equal Opportunity Federal Housing Administration Government National Mortgage Association Office of Policy Development and Research Office of Public and Indian Housing

Contemporary social welfare programs in the United States

Transfer payments	Temporary Assistance for Needy Families Social security Supplemental Security Income Social Security Disability Insurance Unemployment insurance

Public housing	Section 8 (housing) Office of Public and Indian Housing

Food	Supplemental Nutrition Assistance Program WIC Child and Adult Care Food Program Nutrition Assistance for Puerto Rico School meal programs in the United States School Breakfast Program Farmers' Market Nutrition Program Summer Food Service Program Special Milk Program Nutrition Assistance Grants Reduced-price meal Food Distribution Program on Indian Reservations

Education	Head Start Program Federal Supplemental Educational Opportunity Grant

Grants & subsidies	Community Development Block Grant Child care and development block grant HOME Investment Partnerships Program Housing trust fund Mutual self-help housing NeighborWorks America Urban Partnership Bank HOPE VI Government National Mortgage Association FHA insured loan HUD Neighborhood Networks Renewal community Empowerment zone Outreach and Assistance for Socially Disadvantaged Farmers and Ranchers Low Income Home Energy Assistance Program Lifeline

State & territory	California Puerto Rico

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