More lenders that traditionally sold their mortgages to large aggregators are knocking on Ginnie Mae’s door these days. And that makes the agency’s president, Ted Tozer, a happy man.
As to why this is happening, that’s simple. With Bank of America out of the correspondent market for almost a year, and with other aggregators paying paltry sums for the ‘servicing released premium,’ many mid-sized FHA lenders (banks and nonbanks alike) want to become direct issuers.
“They can deal directly with us,” said Tozer, who has been in charge of the agency since early 2010. “The mortgage landscape is changing so quickly” he noted, adding that companies, more than ever, need to “think in terms of controlling their own destiny.”
Ginnie Mae approved 34 new issuers in fiscal year 2012 (which ended Sept. 30), bringing the total universe of government-approved firms up to 406.
For the year just ended, Ginnie Mae MBS issuance came to $388 billion, up 11% from FY 2011.
Small lenders applying to become Ginnie Mae issuers generally are turned away because they do not have the financial wherewithal and/or expertise to issue and service. Besides, the secondary market agency (whose budget is set by Congress) doesn’t have the resources and staff to monitor a large number of small issuers.
“Some are rejected and others withdraw their applications once they understand the process,” Tozer said in a recent interview with National Mortgage News.
Still, the GNMA chief wants to ensure the “smaller guys” have an outlet for their mortgages and remain competitive in the marketplace.
To this end, he is encouraging large credit unions, the Federal Home Loan Banks, and other players to create co-operatives that can funnel and securitize Federal Housing Administration, Department of Veterans Affairs and Rural Housing Service guaranteed loans through Ginnie Mae. (For the full story see the Monday paper edition of NMN this week.)