In a setback for mortgage bankers, a top federal housing official is voicing doubts about the Government National Mortgage Association's effort to expand its securities program.

Alfred DelliBovi, deputy secretary of housing and urban development, said in an interview that Ginnie Mae does not yet have an adequate blueprint for issuing so-called real estate mortgage investment conduits, or Remics.

Mortgage bankers have urged Ginnie Mae to issue Remics as a way of trimming interest rates for consumers and stimulate housing demand.

Mr. DelliBovi said he wants to see a detailed plan before approving a move by Ginnie Mae into the Remic market. "If this were an automobile, I'd want to launch a Mustang and not an Edsel," he said.

Disappointment on Wall Street

His hesitancy is a blow not only to mortgage bankers but to Wall Street dealers and Ginnie Mae officials as well. The association's top executives have repeatedly signaled support for issuing Remics.

Proponents put forth a public-interest argument. Creation of Ginnie Mae Remics, they say, would increase demand - and prices - for traditional Ginnie Mae securities because such securities are needed to back Remics.

Higher prices for Ginnie Maes should translate into marginally lower rates for consumers.

Mr. DelliBovi acknowledged that rates on the loans that back Ginnie Mae securities would probably fall by 10 to 20 basis points if a Remic market were started.

Nearly 10% of all new mortgages go to Ginnic Mae, while about 50% are sold to its cousins, the Federal National Mortgage Association and the Federal Home Loan Mortgage Corp. The rest are either securitized privately or held by banks, thrifts, and other entities.

|A Market-Proven Product'

Mr. DelliBovi cautioned that Ginnie Mae, which is part of HUD, would have to greatly expand its 70-member staff or hire outside firms to manage the business soundly.

That means it would probably take at least a year for any Remic program to get off the ground, he said.

"I'm a little disappointed that he feels it would take that long," said Robert O'Toole, senior staff vice president of the Mortgage Bankers Association of America. "The Remic is a market-proven product."

Fannie Mae and Freddie Mac have been successfully issuing Remics since the late 1980s.

A Cautionary Note

"It would be nice if we could figure a way for Fannie or Freddie" to administer a Remic program for Ginnie Mae, Mr. DelliBovi mused.

But such an arrangement could raise conflicts because HUD is the chief regulator of Fannie Mae and Freddie Mac, Mr. DelliBovi said.

Mr. DelliBovi briefed Wall Street dealers earlier this week about his concerns, and invited recommendations on how to operate a Remic program.

But he ended on a cautionary note. Washington won't support any program that results in "the American taxpayer being socked with new costs a few years down the road," he said.

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