Decoder: Meet Ginnie Mae
Most people know about Fannie Mae and Freddie Mac, but what about Ginnie Mae? As Nancy Marshall Genzer reports, she may be a possible model for her siblings Fannie and Freddie.
Ginnie Mae logo (ginniemae.gov)
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Kai Ryssdal: Ginnie Mae, the Government National Mortgage Association, said today it issued a record $34.5 billion in mortgage-backed securities last month. Not bad for a far less well-known sibling. Ginnie comes from the same family as two other companies we've gotten to know pretty well over the last year. That would be Fannie Mae and Freddie Mac. They're the government-backed companies that are behind a huge percentage of the mortgages in this country. And who were, it should be said, recipients of a large chunk of bailout money last fall. So, how does Ginnie fit into that family? Marketplace's Nancy Marshall Genzer has the answer in the latest installment of The Marketplace Decoder.
NANCY MARSHALL GENZER:
RICO GAGLIANO: She's a bit of a wallflower. Wears sensible shoes. She's more stable than her siblings, Fannie and Freddie, but was never as popular. And she has a face only an economist could love. Meet Ginne Mae.
OK, so maybe Ginnie Mae wouldn't make it as a contestant on the Dating Game. But economists do love her.
ALAN MENDELOWTIZ: She has a good personality.
Allan Mendelowitz heads the Federal Housing Finance Board. He says a good personality boils down to one thing: stability. And Ginnie Mae has it in spades. She didn't go through the partial privatization process that Fannie Mae and Freddie Mac did. Ginnie is part of the Department of Housing and Urban Development. And Ginnie only deals with conventional mortgages issued by government agencies, like the Federal Housing Administration and Veterans Administration. Ginnie guarantees these mortgages. And she's backed by her favorite uncle -- Uncle Sam.
MENDELOWITZ: If you have a Ginnie Mae guarantee, you have a full faith and credit guarantee of the federal government.
Investors like Ginnie's conservative bent. Three years ago, at the height of the subprime craziness, she guaranteed less than 5 percent of mortgage-backed securities At the end of last year, that number zoomed up to 35 percent. She's now neck-and-neck with Fannie and Freddie.
But Ginnie is still very picky about the loans she backs. She's now popular enough to be included in President Obama's foreclosure prevention plan. New White House guidelines for loan modifications will apply to most Ginnie-backed mortgages. And if there are foreclosures, investors in Ginnie's mortgage-backed securities still get paid. And guess who might be remade in Ginnie's image?
BERT ELY: When folks talk about nationalizing Fannie and Freddie it is quite possible that they'll be restructured in a way that would be very much like the Ginnie Mae structure.
And, banking consultant Bert Ely says, eventually, Fannie and Freddie could be folded into Ginnie Mae. As an amped-up federal agency, Ginnie could forget about being a contestant. She'd be a player.
In Washington, I'm Nancy Marshall Genzer for Marketplace.
Comments
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From Chicago, IL, 11/19/2009
I am in dire need of a modification on my loan, due to the property taxes going up and causing my mortgage to increase by almost $700.00. Also, with my loan being a rehab loan, I had to take out 2 add'l loans to complete my rehab, not to mention maxing out my Home Depot account. Which has increased my debt to income and I can not refinance. My loan is a Ginnie Mae with Wells Fargo and they refuse to modify my loan and allow me to enjoy my home.
Angela Baquet
From Henderson, NV, 10/05/2009
I just found out that I have Ginnie Mae loan, and have been trying to work with a loan modification with Gmac, since Jan with no luck. Now I am trying to do a short sale, which has been on the table with no results since May, and now Gmac said they refused the short sale because I dont live in the house, which is untrue. The house was rented, but in 2008, I lived in the house. So again the games continue. Now Wednesday they are foreclosing on my home. I sent all the necessary papers but no luck. Judy/Henderson Nv
From Wilmington, NC, 07/25/2009
Freddie and Fannie, but not Ginnie? I am on my second attempt to get a loan modification. There were requirements I had to meet on my end. I have met those obligation. However, one of the reasons, I was denied the first time, was my loan was held by Ginnie Mae. I was told that if Ginnie Mae was "on board" I would probably get a loan modification. I google almost every day. I have seen no indication that Ginnie Mae is "on board" . Tragic. We bail out Freddie, Fannie and Wells Fargo, my Mortgage company, but a part of the U.S. Federal Government that will probably cost me my home, not save it. It boggles my mind.
From FL, 07/18/2009
I, too, was just given all the information for me to begin my loan modification under the Obama Mortgage plan until my mortgage lender realized I had an FHA Ginnie Mae loan. Please tell me since the March ruling that someone has come up with a way to include all of us who do not have Freddie Mac or Fannie Mae loans. We, too, are suffering this economic crisis as well. Please advise what we are to do who are heading towards foreclosure with a Ginnie Mae??
From Naples, FL, 07/17/2009
I have a ginnie Mae backed home mortgage- plain and simple-will this qualify for the stumulus pkg reduction, and where do I go to find out?
From springdale, MD, 06/26/2009
I agree with By teresa boone - Countrywide told be the exact same thing. She immediately start asking me about my bills when can I pay my mortgage and my credit is going to be mess up. I told her I didn't want to hear that mess, I already know this. I told her I was qualified for the Housing Assistance Plan and then she tell me I am not because my investor is Ginnie Mae, I ask her who in the hell is Ginnie Mae. When I purchase my home from Centex they didn't mention Ginnie Mae they said they put me in this American Dream program.
From Elk Grove, CA, 06/03/2009
I have the same problem as others with ginnie may not being part of the Obama program. My home value is down and my pay has been reduced by 10%, and will be down another 5% by July. A total of 15% monthly pay reduction. I would like to take advantage of the new interest rates to offset these losses. Please do a program on this! Thank you!
From Miami, FL, 04/27/2009
I am also in the same boat, I have contacted my mortgage company Flagstar and they have told me the same thing the stimulus package is only for Freddie Mac and Fannie Mae customers. I have my loan with Ginnie Mae, try contacting the main office in Tallahassee 202-401-8970 and complain. It is unfair we should get help. My home has drop is value over 60% and there are over 120 foreclosures.
From baltimore, MD, 04/22/2009
I can understand Ginnie Mae has a face only economist can love but in this economic time, it doe not amount to much when there are no advantages for homeowners who are in a bind and cannot take advantage of the stimulus, i have heard that people who qualified becasue they were under fannie mae and freddie mac as far a s obama's stimulus is concerned only neede to make a phone call and give information to their motgage companies over the phone and had to send an x amount of money to the mortgage company, ( the money was not based on how far back they were on their mortgage)I was even told that their mortgae payments dropped as low as $200.00 to $300.00 less than what they were paying a month and then they had a free month before they had to sent the first revised mortgae payment in. I called my mortgae company ( COUNTY WIDE) and asked about the modification loan, she did not give me a yes or a no she transfered me and the next representative starting asking me information about my income, the bills I PAY A MONTH AND THEN SHE SAID, YOU DO NOT QUALIFY FOR THE STIMULUS BECAUSE YOU ARE UNDER GINNIE MAE, BUT THEN SHE SAID A REP WILL CALL YOU, AND IF WE CAN HELP YOU YOUR MORTGAGE PAYMENTS WILL BE MORE THAN WHAT YOU OR PAYING NOW.. I DO NOT THINK I NEEDED TO HEAR THAT, THIS IS LIKE BEING BETWEEN A HARD ROCK AND A SOFT PLACE. IN OTHER WORDS MY NEIGHBOR WHO IS IN THE SAME SITUATION I AM IN WILL BE ABEL TO SAY HIS OR HER HOME AND PAY LESS PER MONTH OR MORTGAGE PAYMENTS AND MIGHT BE ABLE TO GET ASSISTANCE BUT WILL HAVE TO PAY MORE MORTGAGE PAYMENTS, BUT MIND YOU LIKE THE YOUNDG LADY TOLD ME ON THE PHONE THIS IS NO REFINANCING, GIVE ME A BREAK.
From us, CA, 04/22/2009
It is estimated that Obama's plan could benefit 8 to 9 million homeowners from the new modification procedures. So how do you know you qualify for the Mortgage Modification? Check the website http://obamamortgage2009.blogspot.com/ to see if you qualify. I was also in trouble and I am glad I did check it before I talk to my mortgage company and it helped - John Mayer, California
From baltimore, MD, 04/21/2009
I HAVE READ THE COMMENTS AND I too was under the impression that I could get assistance under the stimulus plan , but just as well I WAS TOLD BY MY MORTGAGE COMOANY I WAS UNDER GINNIE MAE, I DO NOT THINK THIS IS FAIR TO ALL HOMWOWNERS, THIS DOES NOT GIVE ME AN OPPORTUNITY TO HAVE THAT ADVANTAGE,we are all in the same boat with this economy the way it is,this seems so infair, i went into the websit, whitehouse.gov and sent my concerns to them, I know they get a lot of e-mails i hope they read mine and look into this matter, anyone who is in my situation please go into the web site and let them know we need assistance too, THANKS
From oak park, CA, 04/21/2009
It is estimated that Obama's plan could benefit 8 to 9 million homeowners from the new modification procedures. So how do you know you qualify for the Mortgage Modification? Check the website http://obamamortgage2009.blogspot.com/
to see if you qualify. I was also in trouble and I am glad I did check it before I talk to my mortgage company and it helped - John Mayer, California
From lawrenceville, IL, 04/15/2009
How do I find the list of names for tax checks and stimulus checks never received? I live in Lawrenceville Georgia
judy wyndham
From westland, MI, 04/14/2009
Hello, like Jon P I am looking for information on the Ginnie Mae loans and the Obama plan. I would like to reduce my interest rate or reduce the amount of my loan since the value is not there. I could also reduce the term from 30 to 20 or 15 since my loan was established in 2003. Please advise if you find out
From Knoxville, TN, 04/11/2009
I see that you state Ginnie Mae is part of Obama's foreclosure prevention plan, however the government site makinghomeaffordable.gov only list Freddie and Fannie to be able to use this plan. My mortgage officer also says I'm not able to take advantage of it because my loan is with ginnie mae. I have searched the web looking for offical word on ginnie mae's inclusion into the foreclosure prevention plan with no luck. Where can one find said information? Note: because of cuts where I work, my mortgage went from 29% of may pay to 40% so I was hoping to take advantage of the plan. Thanks so much, Jon
04/08/2009
Bigger might not be better. Putting three giant bureaucracies together to make a giant Ginnie Mae sounds like a horrible idea. If they are already too big to fail ..
From Carpinteria, CA, 04/08/2009
"And Ginnie only deals with conventional mortgages issued by government agencies, like the Federal Housing Administration and Veterans Administration"
Nancy, I liked your report on GNMA, but FHA and VA loans have NEVER been considered CONVENTIONAL mortgages. I would know, I was an FHA correspondent-lender for 20 years. Conventional loans are loans that are NOT insured by FHA or VA. Conforming loans are those under the FNMA loan limits. FHA and VA loans have always been a more rational alternative to the sub-prime market, and have traditionally filled that role. Only because government regulations made it more difficult to make FHA and VA loans for lenders (not borrowers) were sub-prime lenders able to capture much of the FHA and VA market in the past two decades. Borrowers would have almost always been better off if put into a government-backed loan than a sub-prime loan because the loan terms were more constrained. FHA ARM loans are not nearly as onerous as most sub-prime ARM loans. Of course, that is why Wall Street loved the sub-prime loans, because they paid absurd interest rates in a low interest rate market.
For reference to my point see:
http://www.finweb.com/mortgage-loan-education/conventional-loans-pros-and-cons.html
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