In a bold attempt to recapture business lost to the Federal Home Loan Banks' recent expansion of its Mortgage Partnership Finance (MPF) program, last week Ginnie Mae made public its proposal to broaden the loans eligible for its Program I mortgage-backed securities pools, a development that could profoundly change the competitive landscape of the MBS market.

Reactions from both dealers and investors have been extremely wide-ranging - running the gamut from predictions that the Ginnie I program will be utterly destroyed to voices of encouraging approval saying that such changes would be a healthy boost to GNMA liquidity and overall mortgage market competition.

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