PARK CITY, Utah — The Government National Mortgage Association's former president said the agency has become so big and important that Congress should make it independent from the Department of Housing and Urban Development.
"An entity with such a critical mission can no longer be treated as if it is just another program office" within HUD, Joseph Murin said at the annual Midwinter Housing Conference in late February.
During his tenure at the agency, which lasted just over a year, the portfolio of mortgage-backed securities that Ginnie guarantees grew from $350 billion to $850 billion.
Now it is close to $1 trillion.
"I don't care who you are, $1 trillion is a whole big bunch," said Murin, who after leaving office in August formed the Collingwood Group consulting business in Washington with former Federal Housing Administration Commissioner Brian Montgomery.
If Ginnie Mae "is to fulfill its mission in the years ahead," Murin said, "it requires a structure that provides for its independence and the ability to respond to the always changing secondary markets."
Otherwise, he said, the agency's ability to continue to provide liquidity "will be severely compromised."
Ginnie Mae was created in 1968 and issued the first mortgage-backed security in 1971.
In the middle of the last decade there was some uncertainty about the agency's future.
Some lawmakers questioned whether it was even needed in the first place.
Government-guaranteed securities then had dwindled to what Murin said was "a paltry" 3% of the mortgage-backed securities issued annually.
But then the housing and mortgage markets went south, and Ginnie Mae, along with the FHA, Fannie Mae and Freddie Mac, became the stalwarts of the mortgage business, touching in one way or another a good 90% of the market.
Now, Murin said, Ginnie Mae and the FHA have been pushed to the brink and "can't do any better, because they are part of the government."
"You can't lay much more on these two agencies, not if they are going to serve their mission and serve it well," he said.