The Bond Market Association announced the formation of a committee to advise Ginnie Mae on ways to become more competitive while improving the credit performance and investor interest in its MBS program.
Rishi Chadda, vice president in MBS trading at Goldman Sachs, will head the committee of BMA members who trade in and research Ginnie Mae, a well as other MBS. In a BMA release, Chadda stated that the committee will continue the dialogue begun when the BMA responded to Ginnie Mae's request for suggestions on how it could improve its MBS and multiclass securities programs, mentioning that their first priority is to identify ways for Ginnie Mae to improve disclosure and provide more information on the loans backing its pools. Higher levels of disclosure, Chadda said, will make investors more comfortable investing in Ginnie's MBS program and, in turn, improve pricing and liquidity.
Aside from improving disclosure, the Association's earlier letter also implied Ginnie Mae improve product innovation, be more competitive with the conventional mortgage market in serving the needs of low-income borrowers, and consider ways to create bonds with maturities of ten years or less.