Ginnie Mae loan volume soars
Providing more evidence of Uncle Samâ€™s key role in supporting the housing markets, Ginnie Mae said today that it has doubled its output of mortgage-backed securities.
Thatâ€™s good news for borrowers who can qualify for home loans that come with insurance or guarantees from the Federal Housing Administration, the Department of Veterans Affairs and certain other government agencies.
Ginnie Mae â€“ the Government National Mortgage Assn. â€“ bundles these government loans to create bonds sold to investors around the world. The process allows lenders to sell off their mortgages rather than keep them, using the proceeds to make new loans.
Since private loan securitization was done in by the subprime meltdown, these Ginnie Mae mortgage-backed securities, along with those from government-controlled Fannie Mae and Freddie Mac, are the only outlet for lenders who donâ€™t want to run the risks of keeping mortgages on their own balance sheets.
Ginnie Mae said it issued a record $34.5 billion in mortgage-backed securities in March. For the first three months this year, issuance of the bonds totaled $89.7 billion, compared to $38.9 billion for the first three months of 2008.
Ginnie Mae President Joseph Murin said the increase â€œrepresents our growing efforts to support the housing market and struggling homeowners during these turbulent times.â€
In addition to FHA and VA loans, Ginnie Mae mortages include those provided through the Department of Agricultureâ€™s Rural Development program, and the Department of Housing and Urban Development's Office of Public and Indian Housing.
--E. Scott Reckard