Wall Street is set to do its best to help the Government National Mortgage Association to finally get off the ground with its long-stalled real estate mortgage investment conduit.

In response to a request last month from Alfred A. DelliBovi, deputy secretary of the Department of Housing and Urban Development, the Public Securities Association is forming a committee that will meet Sept. 8 at PSA headquarters in New York to discuss what will be required for Ginnie Mae to develop a Remic.

"We are responding to his request to become involved," said John Sites, chairman of the Mortgage Securities Division of PSA and senior managing director and executive vice president of Bear, Stearns & Co.

DelliBovi has said the agency has not developed an adequate business plan for issuing its mortgage-backed securities through Remics. Other companies, including the Federal National Mortgage Association and brokerage firms, have issued Ginnie Mae MBS through Remics, which permits the MBS to be sliced into myriad derivatives to meet various investment purposes.

If Ginnie Mae ultimately is permitted to issue mortgage-backed securities through Remics, it would become the second federal agency to do so using securities backed with the full faith and credit of the federal government.

The Department of Veterans Affairs June 15 issued the first Remic security backed by the full faith and credit of the federal government. While mortgage-backed securities issued by Fannie Mae and Freddie Mac carry the implied backing of the federal government, market experts believe that Ginnie Mae MBS issued via Remics will bring higher prices that would result in a drop of interest rates on mortgage loans backed by Ginnie Mae by as much as 20 basis points.

"There is a definite demand for the product." said Andrew S. Carron, Sites' predecessor as chairman of the PSA's Mortgage Securities Division and a director of fixed-income research at the First Boston Corp. "There are many types of investors who are limited only to those securities backed by the full faith and credit of the federal government."

Michael Taliefero, director of the Washington office of Channeling Capital. an Oakland, Calif.,mortgage consulting firm, was skeptical about DelliBovi's criticism of the management capacity of Ginnie Mae. "They can always contract out for managers of a Remic program." he said. "I think it is evidence of a lack of vision at HUD."

DElliBovi said even if the management of a Remic is contracted out. Ginnie Mae still retains the ultimate responsibility for the investment scenarios chosen for the MBS derivatives issued through the Remics.

Taliefero said the highest priority is for HUD to resolve problems at the Federal Housing Administration, including what he considers an uncompetitive FHA insurance premium.

"If the FHA problems are resolved and Ginnie Mae is permitted to use Remics, HUD will have a very good product." he added.

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