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More than 700 mortgage originators, housing finance experts, and government officials are attending the third annual Ginnie Mae Summit in Arlington, Va. The two-day Summit will explore the biggest challenges facing the housing industry, including the shift to independent mortgage bankers, new business models for managing mortgage servicing rights, and the uncertain regulatory environment.
“After the tremendous upheaval over the last five years, the housing finance industry is truly at a crossroads,” said Ginnie Mae President Ted Tozer. “The surge in independent mortgage bankers, the increased frequency of mortgage servicing rights transfers, and the complexity of our Issuers business models is straining our capacity. The question for the future will be whether government programs will be for the many or just a few."
The 2015 Summit takes place as the industry continues to manage the transition from traditional depository institutions to independent mortgage bankers (IMB) in the wake of the financial crisis. The number of IMBs in Ginnie Mae has increased from 18 percent in 2010 to 64 percent in 2015, a change that Ginnie Mae has welcomed.
“We need the new entrants,” said Tozer.
Ginnie Mae issuers have channeled an additional $602 billion into U.S. housing. IMBs have helped almost five million people get a mortgage since banks retreated from the market in 2011. In addition, Ginnie Mae’s outstanding unpaid principal balance now stands at nearly $1.6 trillion dollars, an increase of more than 50 percent in five years. Further, the corporation saw its highest monthly issuance guarantees in history in July with $47.1 billion dollars.
“The steady, continued growth of Ginnie Mae is a testament to how much they are necessary to the housing finance system,” said Bill Cosgrove, owner and CEO, Union Home Mortgage Corporation. “They are delivering an invaluable service by providing access to the secondary mortgage market, particularly for smaller institutions. We are building our net worth through Ginnie Mae.”
Tozer told attendees that Ginnie Mae will continue to meet the evolving needs of the housing finance industry, however, today’s mortgage market is vastly different than the one in which Ginnie Mae was conceived nearly 50 years ago.
“Today’s risks are a lot greater and the business models of our issuers are increasingly more complex,” Tozer said. “And, when you add in sharply higher annual volumes, more frequent trading of servicing rights, these risks are amplified many times over. We must keep pace with the industry’s transformation.”
“It’s crucial that Ginnie Mae be able to efficiently monitor risks presented by this new environment,” noted Mark Zandi, Chief Economist, Moody’s Analytics. “Quite frankly, without Ginnie Mae, FHA, and VA, we'd have gone into the abyss during the economic crisis. But today, there is reason for optimism about the direction of the housing finance system.”
“Bringing capital to mortgage servicing rights is very complex,” said Stanford Kurland, Chairman & CEO, PennyMac Loan Services. “It would be foolhardy for Congress not have more invested in understanding the risk tolerance of seller servicers.”
The 2015 Ginnie Mae Summit provides an opportunity for networking and collaboration between leading lenders, document custodians, D.C.-based policy makers, members of Congress and staff, federal agencies, real estate trade groups and industry analysts. Educational sessions will also provide in-depth examination of Ginnie Mae’s business and programs from a variety of perspectives.