The Ginnie Mae guaranteed a record $418 billion in MBS in fiscal year 2009, but it turned out to be less profitable than in previous years.

Net income totaled $509.6 million in FY 2009, down from $1 billion in full-year 2008 when Ginnie MBS issuance totaled only $277 billion.

Low interest rates appear to be the culprit, according to an audit of Ginnie Mae's financial status and internal controls by the accounting firm Carmichael, Brasher, Tuvell & Co.

The annual audit shows that Ginnie's interest income fell to $109.5 million in full-year 2009 from $633.5 million in full-year 2008.

MBS program revenue totaled $547.8 million, up from $373 billion in the previous year. The audit also shows that defaulted Ginnie Mae issuers have left the agency with $26.2 billion in single-family loans, up from $400 million in FY 2008.

Ginnie Mae also could suffer losses due the recent bankruptcy filing of Capmark Financial, which has issued $7.5 billion in Ginnie Mae multifamily MBS.

"Estimated losses on this default are not readily determinable," the auditors said.

However, Ginnie Mae has $560 billion in a loan loss reserve that "management believes ... is adequate to cover any losses" related to Capmark's MBS.

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