During my career in financial services, I have seen market cycles come and go. Generally, our industry has seen big changes occur—like the rise of mortgage banking practices and securitization beginning in the 1980s—followed by several years of relative stability. But this pattern has not proven to be the case during the years since the Great Recession of 2008-11, and the housing bust that helped cause it. Instead, particularly in the Ginnie Mae market, we have seen one game changer after another occur:
►The prolonged exodus of traditional market participants
►The rise of non-depositories, from issuing securities to servicing mortgages
►New types of structures and financing for mortgage servicing rights
►The continued surge in FHA lending
►A much more active regulatory environment
►A dramatic expansion, propelled by non-depositories, in the issuer base for Ginnie Mae securities
These are a lot of changes to absorb, and how each one of us responds can determine the fate of our business. And that’s what makes the 2015 Ginnie Mae Summit such an important event. Our annual Summit has become a central gathering place for business partners, government officials, affordable housing leaders and academic minds. And this year’s Summit, which takes place in late September just outside Washington, D.C., is no exception.
Together, we will be exploring all the game-changers. We will be discussing how we can work together more effectively, be it creating a business plan to address changes in mortgage servicing rights or simply adjusting operations to comply with the latest Ginnie Mae policy. We will be taking a long, hard look at housing markets—Will single-family continue a slow recovery? Is the surge in multifamily sustainable? How can consumers afford to pay a mortgage or rent? We will be asking the experts one big question on everyone’s mind: How will the economic turmoil in China affect interest rates, as well as the mortgage-backed securities (MBS) market, here in the United States?
With this event being a Summit hosted by Ginnie Mae, much of the program involves how we work with business partners, focusing on our expectations of them and their expectations of us. So we will be doing deep dives into business policies, operational practices, quality control, servicing arrangements, securities pooling, institutional compliance and more.
All these subjects are critically important to Ginnie Mae’s ability to support mortgage markets in a safe and sound manner. And we are approaching all this as a market leader. Our market footprint is now par with the GSEs, with an MBS portfolio of $1.57 trillion through July and business volume so far this year of $350 billion, also through July. Investments in our infrastructure will produce even more effective risk management practices and systems technology. And our people will continue to aid the market in thought leadership.
Put all this together—transformation in mortgage markets and transformation at Ginnie Mae—you can see why our Summit continues to attract industry leaders. The Summit has potential to become its own game-changer, in good way, for all of our businesses. That is my hope, and I look forward to reporting on key findings from our Summit in a future column.
Ted W. Tozer is was sworn in as president of Ginnie Mae on Feb. 24, 2010, bringing with him more than 30 years of experience in the mortgage, banking and securities industries. As president of Ginnie Mae, Tozer actively manages Ginnie Mae's $1.5 trillion portfolio of mortgage-backed securities (MBS) and more than $460 billion in annual issuance.
This article originally appeared in the September 2015 print edition of National Mortgage Professional Magazine.
