Secretary Martinez rang the opening bell of the New York Stock Exchange on Tuesday, and later addressed institutional investors and other Wall Street financial professionals. The Secretary announced details of new Ginnie Mae initiatives designed to expand homeownership, benefit investors, and enhance the agency's portion of the U.S. secondary mortgage market.

Martinez said that Ginnie Mae will create a new securitization program to pool hybrid adjustable-rate mortgages, disclose new data on the loans underlying its mortgage-backed securities, and expand its Targeted Lending Initiative to new portions of U.S. states along the Mexican border. At left, Secretary Martinez, Ginnie Mae President Ronald A. Rosenfeld and other Ginnie Mae and NYSE executives prepare to open the Wall Street exchange's operations for the day.

"Today's announcements further demonstrate the Bush Administration's commitment to deliver results that expand homeownership and affordable housing opportunities," Martinez said on March 25. "We estimate that the Hybrid ARM program and the expanded Targeted Lending Initiative (TLI) benefit more than 45,000 families, which will help meet the President's goal of increasing minority homeownership by 5.5 million by the end of the decade."

Hybrid ARM Program. Starting Oct. 1, Ginnie Mae will have a mortgage-backed security guarantee program for both recently announced Federal Housing Administration and U.S. Department of Veterans Affairs hybrid ARM mortgages. The program will securitize FHA's 3-, 5-, 7- and 10-year hybrid ARMs and the VA's new 3-year hybrid ARM. The new FHA and VA products will offer borrowers a fixed interest rate for an initial period, followed by a capped, adjustable rate. The program is expected to address investor demand for a securitized hybrid ARM investment while benefiting as many as 40,000 families, especially first time homebuyers and the families of active veterans.

New Data Disclosures. Effective Jan. 1, 2004, Ginnie Mae will offer additional detail on the loan pools underlying both its single-family and multifamily securities, providing investors with new information to better forecast prepayment speeds. New single-family pool information will include a weighted average payment-to-income ratio, weighted average loan-to-value ratio, distribution of remaining terms to maturity, distribution of original loan terms, distribution of original loan sizes and, where possible, a distribution of borrower credit scores. Multifamily securities will include loan level delinquency information.

Expanded Targeted Lending Initiative. Ginnie Mae is expanding the geographic reach of its TLI to include the colonias along the U.S.-Mexico border. The TLI has already created 100,000 American homeowners by providing market incentives to lenders to write mortgages in underserved areas. Ginnie Mae reduced its guarantee fee by up to 50 percent in the targeted areas.