Ginnie Mae Issuance Poised for Rebound?

Las Vegas-The issuance of Ginnie Mae securities has fallen off in recent years, in part because lenders have been originating fewer government-backed home loans. But the director for single-family housing at Ginnie Mae, Michael Garcia, sees evidence of a turnaround.

Speaking at the California Mortgage Bankers Association's Western States Loan Servicing Conference here, Mr. Garcia said that Ginnie Mae's outstanding portfolio of mortgage securities has increased for three consecutive months.

Ginnie Mae estimates that it will be backing $406 billion of outstanding mortgage-backed securities at the end of this year. That would still be down slightly from $412 billion at the end of 2005. Outstanding securities stood at $453 billion at the end of 2004.

Issuance of new Ginnie Mae MBS continues to fall despite the stabilization in recent months. Ginnie Mae issuance is expected to total $82 billion this year, down from $92 billion in 2005, he said.

Mr. Garcia said the drop shows the need for changes to make the Federal Housing Administration program more attractive in the market. He said Ginnie Mae continues to update its loan and loan pool reporting systems, with a goal of making the dissemination of information more timely for investors and ultimately improving the pricing of Ginnie Mae securities.

SNAPSHOT: Issuance of Ginnie Mae MBS

2003 $216 Billion

2004 $149 Billion

2005 $91 Billion

2006 $82 Billion

SOURCE: Ginnie Mae

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