Categorized | Finance and Mortgage

Ginnie Mae Becomes Second Largest Mortgage Funder

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The government owned corporation Ginnie Mae has become the second largest back of residential mortgage loans, taking the title from Freddie Mac. The corporation was responsible for financing almost sixty percent of home purchases made in the United States during the past year.

The government corporation is responsible for putting together mortgages backed by the Federal Housing Administration. During the past year, it has made over one billion dollars in profit, despite the down housing market.

Out of the three government owned organizations in Fannie Mae, Freddie Mac, and Ginnie Mae, only Ginnie Mae has returned a profit. It has thus far issued more than two hundred and sixty billion dollars in mortgage securities in the past year alone.

The government owned corporation was established in 1968, and developed its first mortgage-backed security in 1970. It is becoming a line of protection of sorts against failing loans and defaults. In fact, many analysts believe that it will likely be an important piece to the equation in terms of rebuilding the housing market in the United States. They believe that the corporation will provide safety nets for taxpayers to avoid another housing crash similar to the one that has crippled the United States over the past few years.

Ginnie Mae has experienced sizeable growth over the past few years, and it is likely that the growth will continue. However, there is uncertainty as to whether or not the government owned corporation would be able to continue its impressive performance. Many analysts believe, though, that it will be able to sustain its current productivity.

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About Drew Wilson

Drew focuses on the Commercial and Mortgage/Finance categories.

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