Issuance of mortgage-backed securities insured by Ginnie Mae inched down to $76.2 billion in November, but remained close to its August peak of $77.62 billion.
Ginnie Mae issuance totaled $76.4 billion
“Historically low interest rates continue to drive home purchases and mortgage refinancing,” said Ginnie Mae Executive Vice President Eric Blankenstein in a press release. “As we enter a new year, investors and issuers can be sure that Ginnie Mae is focused on meeting the diverse product needs of investors and issuers that keep capital flowing to millions of families each year.”
The recent plateau may reflect a combination of seasonal slowing, more cautious underwriting amid the pandemic, and a relative decline in Federal Housing Administration-insured volume that tends to occur in a refinancing boom.
Although lower rates are driving strong interest in all loan types, the price breaks available in the government-sponsored enterprise market generally tend to be more advantageous than those in the FHA market for borrowers who qualify. FHA-insured loans represent a large portion of Ginnie Mae collateral.
Whether Ginnie issuance increases in the future may depend in part on the extent to which the Biden administration wishes to tap the FHA to promote affordable housing and homeownership. The Biden administration
Growth in issuance may also depend on lenders’ willingness to make loans under the FHA program, which large banks have largely avoided since the Great Recession due to compliance liabilities that surfaced in the wake of the housing crash.
During the record-setting fiscal year ended Sept. 30, Ginnie helped finance the second-highest number of first-time homebuyers in its history, according to
Ginnie helped finance 965,115 first-time homebuyers in FY 2020, approaching the high point of 975,340 in FY 2017 and far exceeding the 888,438 it assisted in FY 2019. The FHA was the largest contributor to this number with more than 636,000 mortgages.
