Although the Government National Mortgage Association saw its profits fall by almost 50% for the fiscal year ending in September, agency president Ted Tozer said the government guarantor has enough cash reserves to handle any potential losses.
“Our reserves are fine,” Ginnie Mae president Ted Tozer told National Mortgage News in an interview.
Those reserves total roughly $357 million.
GNMA earned $610 million for the year ending Sept. 30, compared to $1.18 billion in FY 2011. The reason for the decline was an addition to loan loss reserves
Tozer noted that in 2010 the agency set up a reserve fund but was told by its accountants that its set-asides were “too aggressive” but then changed their mind and asked for increases. “We have to do what our accountants say,” he told NMN.
The GNMA chief anticipates that the guarantor will post earnings of $800 million to $900 million in the immediate years ahead.
The agency’s guarantee covers roughly $1.3 trillion of home mortgages, or 14% of the entire mortgage market, according to figures compiled by the Quarterly Data Report.