Ginnie MBS Issuance Hits 4-Year High

The issuance of Ginnie Mae mortgage-backed securities rose to nearly $15 billion in March, the highest rate since November 2003, according to the agency. Theodore B. Foster, senior vice president for mortgage-backed securities at Ginnie Mae, said issuance has been increasing steadily since October. As the subprime mortgage and private-label MBS markets collapsed, "investors began moving toward the safety and stability of Ginnie Mae MBS," he said. Ginnie Mae's share of the MBS market declined to a low of 4% in 2005. Now, the private-label MBS market -- backed primarily by subprime loans -- represents just 7% of the total MBS market, compared with 57% two years ago, Ginnie Mae reported. "Currently, agency and government MBS are the primary sources of mortgage credit available for home financing," Mr. Foster said. "There is strong evidence that this trend will continue. Our issuers have indicated that as much as 30% or 40% of their business may be securitized through Ginnie Mae this year. We expect Ginnie Mae to issue between $175 and $200 billion in MBS in calendar year 2008." Ginnie Mae, a government-owned corporation within the Department of Housing and Urban Development, can be found online at http://www.ginniemae.gov.