SeriousBull

Minnie, Mighty Ginnie Mae. No one seems to care today?

Tags: Bloomberg + GAO + Ginnie Mae + Mortgages

It’s bad enough to think that there’s a some probability that Ginnie Mae can’t produce ownership records on some volume of its mortgages, but consider also that Ginnie Mae, the government agency who guarantees mortgage loans, just maybe be a ticking time bomb ready to implode from its bureaucratic sleep. According to the Bloomberg News article last Friday, February 22nd, numerous lenders can not produce proof of ownership on the

mortgages they seek to foreclose on, and indeed, a full one-half of all mortgage transactions are not tracked in the home-loan industry’s data base. Since Ginnie Mae deals primarily in moderate income and sub-prime loans and uses the Mers home-loan data base, it would seem rather urgent to get a read on what’s up with Ginnie Mae. This is critical because Pension Plans, Mutual Funds, Sovereign Governments, Banks, and individual investors own Ginnie Mae bonds either directly or in bond pools. If indeed some are lost and/or defaulting in large numbers, shouldn’t it be rather urgent to direct some attention to this enveloping problem?  Well, if you listen to Adminstration pundits who still claim all is well, or read only the traditional press who ignore the subject altogether you’d not be aware that any problem is brewing. But SB believes its time for transparency with regard to what the taxpayer burden for Ginnie Mae liabilities are now and may be projected to be. It’s time for GAO to do an audit and report to the public! Continuing to ignore the problem will only make it worse.

February 24, 2008 - Markets, Politics