HUD's FY99 Budget
Congressional Justifications
Government National Mortgage Association

Salaries and Expenses

Budget Activity 4: Government National Mortgage Association

SCOPE OF ACTIVITY

The Government National Mortgage Association (Ginnie Mae) is responsible for the administration of activities associated with the Mortgage-Backed Securities (MBS) and Multiclass Securities Programs and the Management and Liquidating Functions Fund. A brief description of Ginnie Mae's programs is provided below.

Mortgage-Backed and Multiclass Securities. Section 306(g) of the National Housing Act authorizes Ginnie Mae to guarantee the timely payment of principal and interest on securities which are issued by approved entities and which are backed by the Federal Housing Administration (FHA), the Department of Veterans Affairs (VA), or Rural Housing Service. Guaranteeing mortgage-backed securities requires the examination and underwriting of applications from prospective issuer firms, the preparation and supervision of pool documents, the review of books and records bearing on the issuance of mortgage-backed securities, and the issuance of certificates to original purchasers and to secondary market assignees. Mortgage-backed securities guaranteed were $97.6 billion in fiscal year 1997, and it is estimated that guarantees of $107.5 billion will be issued in fiscal year 1998, and $108.7 in fiscal year 1999. Also, as of September 30, 1997, Ginnie Mae was forced to service approximately $827 million of servicing portfolio because of issuer defaults. In addition, Ginnie Mae guaranteed $27.6 billion of Multiclass securities in fiscal year 1997.

Management and Liquidating Functions Fund. Ginnie Mae is responsible for managing and liquidating the portfolio of mortgages acquired prior to the Federal National Mortgage Association (FNMA) Charter Act of 1954 and loans or other obligations that were subsequently acquired as authorized by law. In 1955, the Association was given responsibility for managing and liquidating the remaining portfolio of the Reconstruction Finance Corporation Mortgage Company and the Defense Home Corporation. In 1985, all remaining assets and liabilities of the old "Tandem Plan" programs were transferred to the Fund. The Budget reflects that the Management and Liquidation Functions Fund has an estimated remaining cash balance of $13,818 as of September 30, 1997.

WORKLOAD

TRAVEL

The $10 thousand increase in fiscal year 1999 is proposed to fund expanded on-site visits and monitoring of program participants.

CONTRACTS

The proposed increase of $11 thousand in fiscal year 1999 reflects funding for data and statistical services, and visual arts services. General Support funds the Multiclass, MBS, and related administrative function.