STATEMENT BY HUD SECRETARY ALPHONSO JACKSON ON HIS PARTICIPATION IN THE U.S. - CHINA STRATEGIC ECOMOMIC DIALOGUE

"The U.S.-China Strategic Economic Dialogue taking place in Washington over the past two days has been very constructive. Discussing the mutual benefits of the growing connectivity between the economies of our two countries is an important topic. One statistic in the financial marketplace bares this out most of all: In 2002, the total Chinese investment in U.S. agency mortgage-backed securities was just over $100 million. By June 2006, this number had grown to over $107 billion -- a nearly 1,000-fold increase in less than 5 years.

The Chinese economy is benefiting from high-yielding, safe investments in U.S. mortgage-backed securities. Here at home, American homeowners are benefiting from lower interest rates on mortgage loans resulting from greater Chinese demand for these securities. It's a win-win for the U.S. and China and our peoples, and I look forward to further discussions with my counterpart when I travel to China to talk about integration of our capital markets."

BACKGROUND: A mortgage-backed security represents ownership in a security backed by a pool of mortgages. It is a debt obligation similar to a bond that is repaid as the principal and interest payments are made on the underlying pool of mortgages. Mortgage-backed securities are sometimes described as pass through securities because the principal and interest paid by the borrower are passed through to the investor.

Ginnie Mae mortgage-backed securities are backed by the full faith and credit of the U.S. government. The Ginnie Mae guarantee means investors will always receive timely payment of principal and interest due on the securities they hold. The full faith and credit guarantee makes Ginnie Mae one of the safest investments one can make.

Click here for a short summary of "Foreign Holdings of Agency Mortgage-Backed Securities."

###

HUD is the nation's housing agency committed to increasing homeownership, particularly among minorities; creating affordable housing opportunities for low-income Americans; and supporting the homeless, elderly, people with disabilities and people living with AIDS. The Department also promotes economic and community development, and enforces the nation's fair housing laws. More information about HUD and its programs is available on the Internet and espanol.hud.gov.