- James I. Clark III
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Ginnie Mae Taking the Lead on Backing New Mortgages
At a time when the CMBS market has contracted by 60 percent, a story that hasn’t gotten much attention is that fact that one slice of the securitized real estate market is doing phenomenally well.
Ginnie Mae (the Government National Mortgage Association) has provided $124.18 billion of liquidity to the secondary mortgage-backed securities market during the first four months of 2009. $34.5 billion of that was issued during April alone. By contrast, the government agency provided just $58 billion during the same time frame of 2008.
Ginnie Mae helps American families own homes by securing government-insured loans to the Federal Housing Administration, the Department of Veterans Affairs, the Department of Agriculture’s Rural Development Program and the Department of Housing and Urban Development’s Office of Public and Indian Housing.
“We are stable, secure and steadily growing,” said Joseph Murin, Ginnie Mae’s president. “Our issuance growth represents the trust that our issuers and investors continue to have in Ginnie Mae securities. Providing a secure secondary market outlet for government-backed loans is absolutely critical as the economy continues to stabilize.”
Rebuilding the mortgage market is likely to start at the conservative end with investors looking for T-bill-type places for their money. Ginnie Mae has become the blue chip of real estate securities. We have to get over being a society of instant gratification because normality will return – in the words of Ginnie Mae’s Murin, “one deal at a time.”