Interthinx provides advanced name-matching technology to ferret out “bad actors”
Ginnie Mae enhances its risk management strategyMortgagePress.comGinnie Mae, risk management strategy The Government National Mortgage Association (Ginnie Mae) has announced recent enhancements to its risk management strategy. The organization announced a multi-faceted approach in establishing a risk committee, appointing a chief risk officer and reconstituting its issuer review board to ensure its securities continue to remain safe and stable. "Enhancing our risk management process is an enterprise-wide endeavor," said Joseph J. Murin, president of Ginnie Mae. "This is a very turbulent time for the mortgage industry. While our business model significantly limits risk, the current environment and our rapid growth has presented a different set of challenges than we have ever faced before. We have to take a long, hard look at our strategy to ensure we continue on the right path." Given the challenging state of the mortgage industry, Ginnie Mae's explicit full faith and credit backing of the U.S. government has increased the number of lenders turning to the organization for safe harbor. In fact, the volume of Ginnie Mae's monthly mortgage-backed securities (MBS) issuance hit $27 billion in June and $26 billion in July, more than triple what it had been for the same two months in 2007. The enhancements announced today will help Ginnie Mae keep abreast of the financial condition and program compliance of its issuers, thus minimizing risk to the corporation. The risk committee will promote an enterprise-wide approach to risk management. Working with the risk committee, the chief risk officer is responsible for establishing a risk governance structure and providing independent evaluation and oversight of risk management activities. The issuer review board is responsible for evaluating and overseeing issuer activities and compliance. A key element to Ginnie Mae's enhanced risk management strategy is the appointment of Stephen L. Ledbetter as chief risk officer. Ledbetter, who brings 20 years of financial management experience, will continue serving as acting vice president of the Office of Mortgage-Backed Securities in addition to this appointment. Ginnie Mae MBS are backed by government-insured or -guaranteed loans and the corporation does not buy or sell loans, or maintain a portfolio. This business model helps to limit risk. If an issuer defaults on its principal and interest payment obligation to investors and Ginnie Mae takes the issuer's portfolio, Ginnie Mae is largely reimbursed as the new issuer of record - by the Federal Housing Administration (FHA) or the U.S. Department of Veterans Affairs (VA), for example - for losses resulting from borrowers who default. For more information, visit www.ginniemae.gov.