Lehman also noted Ginnie Mae's putting out a proposed rule to start the Ginnie excess servicing program. But compared to conventionals, there has been very little excess servicing retained by the agency, although the new program would likely result in the rise of I/Os retained by Ginnie originators. Potential sources of demand for Ginnie I/Os are accounts needing the explicit government guaranty and choosing to invest in these I/Os for the yield or to short the market as well as buysiders looking for hedges in a slowing housing market. Ginnie I/Os are, according to analysts, more leveraged to the housing market compared to their conventional counterparts with Ginnie borrowers having relatively weaker credit.

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