No She's not a country singer...nor is she a lady. Ginnie Mae is the acronym for The Government National Mortgage Association, Ginnie Mae is Fannie Mae's ssister organization.
While Fannie Mae packages loans into bulk shares for resale to investors, Ginnie Mae buys home mortgages from banks and financial institutions, bundles them together into mortgage backed securities, and then markets portions of these to investors.
The big thing here is the Ginnie Mae's Guarantee:
Ginnie Mae securities are the onlyMortgage backed Securities (MBS) to carry the full faith and credit guaranty of the United States government,which means that even in difficult times an investment in Ginnie Mae MBS is one of the safest an investor can make.
From there web site, here's what their mission is:
"Ginnie Mae, we help make affordable housing a reality for millions of low- and moderate-income households across America by channeling global capital into the nation's housing markets. Specifically, the Ginnie Mae guaranty allows mortgage lenders to obtain a better price for their mortgage loans in the secondary market. The lenders can then use the proceeds to make new mortgage loans available."
Ginnie Mae does not buy or sell loans or issue mortgage-backed securities(MBS). Rather purchasers of the securities receive pass-through certificates to investors and guarantees government assisted loans where other financing is not available
Ginnie Mae guarantees investors the timely payment of principal and interest on MBS backed by federally insured or guaranteed loans -
These are loans that are mainly those insured by the Federal Housing Administration (FHA) or VA loans--those which are guaranteed by the Department of Veterans Affairs (VA).
Other guarantors or issuers of loans eligible as collateral for Ginnie Mae MBS include the Department of Agriculture's Rural Housing Service(RHS) and the Department of Housing and Urban Development's Office of Public and Indian Housing(PIH).
Comments (1)Subscribe to CommentsComment