What Ginnie Mae's newest executive is planning for mortgages

Ginnie Mae's operations chief told the industry Monday he is pursuing data improvements and revisiting several industry suggestions for innovations that could improve operations.

When asked about concepts the Mortgage Bankers Association has recommended exploring such as creating a securitization vehicle for early buyout loans, Chief Operating Officer Joseph Gormley said Ginnie is "taking a step back"  and "looking at it with a fresh lens."

The government securitization guarantor also has a couple initiatives of its own in the works.

"We're certainly looking at and very actively thinking about two things, the first being moving from a monthly liquidation file to daily liquidation file," he told attendees at the Mortgage Bankers Association's secondary market conference in New York.

"I think some of the cyber attacks over the last few years really pulled the blinders away on that. It's very hard to try to rebuild what's happening if you're only getting the data once a month," Gormley added.

How Ginnie Mae is looking at delinquencies

Ginnie also is working on making improvements to static delinquency data it asks its issuers to manage.

"We certainly haven't arrived at any conclusions, but I think we do need a more dynamic way to look at the issuers and how they're looking against their peers in the broader industry," he said.

There has been some upward pressure on delinquencies in the government loans in securitizations Ginnie acts as a guarantor for, but late payments have stabilized more in line with a plateau recently, Gormley said.

"It's something we're looking at carefully. Obviously, there are some impediments for the American consumer, particularly increasing taxes and insurance payments," he added.

Gormley said Ginnie also has been examining debt not traditionally part of credit reporting such as "buy now, pay later" loans, while acknowledging there are some emerging efforts to add them to consumers' track records.

While there are some trends in the market Ginnie is monitoring, Gormley said, "We feel pretty good about our issuer base today. I think most of them are in pretty good shape."

A nonbank capital rule added at the end of 2024 to help manage the risk in a part of the market that has grown over the years has "incentivized some hedging," he said.

Ginnie also is continuing to encourage use of electronic promissory notes by approved issuers. Issuance backed by digital collateral has grown to almost $60 billion, Gormley said. That shows marked growth since 2021 when it accounted for just over $2 billion in issuance.

Ginnie Mae's plans for AI, staffing

In line with broader efforts at the Department of Housing and Urban Development, Ginnie also is looking at how artificial intelligence could be used to handle simpler tasks and free up staff to work on more complex issues.

While some researchers have expressed concern about efficiency initiatives in the public sector impacting Ginnie and the Federal Housing Administration, Gormley said, "I feel good about where we are from a staffing perspective."

Recent senior-level retirements could pave the way for some hiring, he added.

When he was asked about international demand for Ginnie Mae's securities given some of the concerns in the broader market, Gormley said it remains strong.

"We're very excited about some of the possibilities globally, about some countries that had been traditionally invested in Ginnies but maybe kind of on the precipice of getting more involved," he said.