Leaders from Ginnie Mae and the Federal Housing Finance Agency gave hints about what’s in store for their organizations at the Mortgage Bankers Association conference this week.
Following the announcement of the Biden Administration Housing Supply Initiativewhich mentions Ginnie Mae twice, its newly installed chairman said his company is receiving unprecedented attention from the White House for its role in the housing market.
“The chairman is talking about Ginnie Mae and housing supply and that’s never happened before,” McCargo said May 17 at the Mortgage Bankers Association secondary and capital markets conference. “We haven’t really had, in my opinion and in my 25-plus years in this business, that kind of focus on housing and the housing ecosystem and all the moving parts of the White House level and of the Cabinet Secretary that I saw with this one.”
President Biden’s plan calls for increased securitization of the Federal Housing Administration’s Title 1 prefabricated housing loans through Ginnie Mae. It also calls for the exploration of a permanent funding mechanism for loans issued through the Federal Finance Bank’s risk-sharing program with state and local housing finance agencies through the Ginnie Mae securitization platform.
Additionally, Ginnie Mae has a prominent mention in the Ministry of Housing and Urban Development‘s four-year strategic plan. “The reason we’re so prominent in HUD’s strategic plan for the first time in 54 years that Ginnie Mae has been there is because Secretary [Marcia] Fudge really recognizes how incredibly complex and integrated what we do is with everything else,” McCargo said. government programs that support the most underserved people and markets have the tools to access and the ability to really make sure these lending products and programs are available,” she continued.
Asked if Ginnie Mae could align its liquidity standards with the compliant market, McCargo said he was working with the Federal Housing Finance Agency to align and streamline policies. But she added that as a guarantor, Ginnie Mae has a different business model to Fannie Mae and Freddie Mac. She and the FHFA will seek to align where possible, but may diverge if necessary.
In April, Ginnie Mae and the FHFA held a joint listening session on liquidity standards.
FHFA Acting Director Sandra Thompson, speaking later in the session, agreed that communication with Ginnie Mae was important.
“If there’s a problem at Fannie or Freddie with the interview and the interview is taken out, it’s a default issue for Ginnie Mae,” Thompson said. “And we’re talking about the same group of repairers and many of the same sellers.”
A collaborative approach is the responsible way forward, she said.
The collaboration is also important for the future of the amendments to the preferred stock purchase agreement which Thompson suspended last September. But, she admitted, no discussion on this topic took place.
Thompson meets with Fudge, as well as Treasury Secretary Janet Yellen and Securities and Exchange Commission Chairman Gary Gensler on a quarterly basis; Thompson actually speaks with Yellen at least once a month.
“We just haven’t started those conversations on that specific issue,” Thompson said. “But I would say though that the business requirements that we’re pausing are things that we think can be handled by normal oversight, and we’re handling them by normal oversight.” The FHFA is still reviewing the risks and performance of Fannie Mae and Freddie Mac.
“We’re going to have to have these conversations with Treasury, but you know, again, we talk to Treasury all the time about a lot of different things,” Thompson said.
Without directly addressing Biden’s procurement plan, Thompson said “we’re always looking for ways to be helpful because this issue is national, it’s in almost every part of our country.”
“It’s just a very challenging environment now, but I think companies are really looking for ways to be helpful in this space,” she said.