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Ginnie Mae Exits The Stone Age And Embraces Blockchain

Katie Jensen
Jan 26, 2022
AI Technology

'Some of the procurement stuff that we do, maybe it’s archaic, maybe it needs to be innovated.'

KEY TAKEAWAYS
  • The Ginnie Mae Innovation Lab is spearheading this internal effort and recently joined the U.S. Federal Housing Blockchain Network (HBN), a community of people who are dedicated to exploring how blockchain and DLTs may benefit U.S. housing finance.
  • The Ginnie Mae Innovation Lab is bringing in emerging technologies like robotic process automation (RPA), low-code automation, and machine learning to the government-backed mortgage finance system.
  • The lab is currently running multiple evaluations that incorporate blockchain, smart contracts, rapid analytics, and machine learning.
  • Ginnie Mae is on a mission to rapidly evolve the mortgage lifecycle from origination through securitization across the entire U.S. Federal Housing ecosystem.

Is blockchain technology still hip if the federal government starts to use it? After seeing the benefits of blockchain, federal organizations at the top of the U.S. finance industry are starting pick up on this new-fangled technology.

At Ginnie Mae, the use of blockchain technology is growing, as well as distributed ledger technology (DLT), which frees finance staff to focus more on value-added tasks. The Ginnie Mae Innovation Lab is spearheading this internal effort and recently joined the U.S. Federal Housing Blockchain Network (HBN), a community of people who are dedicated to exploring how blockchain and DLTs may benefit U.S. housing finance and homeownership. 

The housing finance agency is slowly coming out of the stone age and starting to let go of its paper intensive processes. The Ginnie Mae Innovation Lab in partnership with the Department of Housing and Urban Development is bringing in emerging technologies like robotic process automation (RPA), low-code automation, and machine learning to the government-backed mortgage finance system. 

The lab is currently running multiple evaluations that incorporate blockchain, smart contracts, rapid analytics, and machine learning. It’s also accessing how to use these innovations and do more higher level artificial intelligence functions. 

“This innovation lab is the platform to assess and run all this technology and make sure that there are use cases that are relevant to us, that can demonstrate the savings,” said Omar Bouaichi, director of Emerging Technologies and Innovation. “AI is key for us, but we need to make sure that when we bring AI in, we understand its impact. We impact the industry we are in, so our choices need to be responsible and accountable. We’re looking at ethics in AI. We’re looking at the performance of AI, the impacts of AI. These are things that the innovation lab has the mandate to evaluate and report to the leadership of Ginnie Mae.” 

Since the lab’s establishment in 2019, analysts have seen technological successes and failures. Some of the technologies the lab experimented with have been implemented at the agency in the form of algorithms for anomaly assessment, low code and RPA, which saves the department time and money. 

The Blockchain network intends to cultivate awareness and education through a number of mediums:

  • Blockchain Idea Campaigns on Crowdsourced Idea Platform
  • Symposiums
  • Virtual Lunch and Learns​
  • Blockchain Ecosystem Alliances

“The innovation lab at Ginnie Mae has been tasked to assess the future of work in terms of what we need for this young generation to join the government, and retain, and train, and participate like we participate,” Bouaichi said. “We are working with our HR department to make sure that we have the right platform for this young generation. … Some of the procurement stuff that we do, maybe it’s archaic, maybe it needs to be innovated.” 

By building these connections, while staying in close communication with the private sector, Ginnie Mae is on a mission to rapidly evolve the mortgage lifecycle from origination through securitization across the entire U.S. Federal Housing ecosystem.

In 2021, Ginnie Mae settled more than $2.1 billion of digital MBS, and anticipates more volume in 2022 as they open up participation to additional issuers.
 

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