Lest anyone think that the government’s position in housing isn’t more than firmly entrenched, Ginnie Mae announced last week that in July it set a record for mortgage-backed security issuance.
In a release, Ginnie Mae said that the corporation guaranteed $47.06 billion in mortgage-backed securities for July, besting the old record set in July 2009 of $46.1 billion.
According to the release, Ginnie Mae guaranteed more than $346 billion in mortgage-backed securities through July, compared to $242 billion at the same point last year.
“This growth is clear indication of the value of our single securitization platform,” Ginnie Mae President Ted Tozer said.
“The scalability of our platform allows Ginnie Mae to support the shift from traditional depository institutions to new entrants – which have primarily been non-depositories,” Tozer added. “The rapid rise of these new entrants has been critical to our growth and to keeping mortgage credit available to middle class America.”
Tozer cited the January announcement of the 50 basis point cut in the Federal Housing Administration’s annual mortgage insurance premiums as one driving factor for Ginnie Mae’s record month.
“Government lending overall has reached an all-time high – and in terms of consumer demand there’s no reason for it to slow, given the FHA’s recent mortgage insurance premium drop and competitive interest rates for FHA, VA, and RHS loans,” Ginnie Mae said in the release.
Mortgage purchase activity has been increasing over the last several months, Ginnie said, adding that July’s purchase activity comprised more than 60% of total issuances, compared to an approximately 34% increase for loan refinances.
“The increase in purchase activity is further proof that the housing recovery is moving into high gear,” Tozer said.
According to Ginnie Mae, its mortgage-backed securities portfolio stands at $1.57 trillion in unpaid principal balance as of July.
“Despite this rapid growth, the Ginnie Mae platform, while fueling competition, also spreads risk among our issuers,” Tozer said.