Ginnie Mae President Ted Tozer noted in a Bloomberg article that since the company increasingly relies on nonbank mortgage companies, he is evaluating if they have enough easy-to-sell assets to survive in times of distress.
The U.S.-owned company, which guaranteed the first mortgage-backed security in 1970, now backs $1.5 trillion of debt. It may increase liquidity requirements for the firms that issue and service Ginnie Mae bonds to protect its profits and taxpayers from losses, Tozer said in a phone interview this month.“Basically every default we’ve had was due to the issuer running out of cash,” said Tozer, 57, a former National City Corp. executive who became Ginnie Mae’s head in 2010. “We’re evaluating it right now.”
This follows reports that nonbanks are experiencing a strong year, with investment banker and outspoken housing analyst Christopher Whalen, predicting that by this time next year, 40% of mortgage originations will be done by nonbanks.