WASHINGTON – The Government National Mortgage Association has been begging the Office of Management and Budget for more funding to increase its monitoring of mortgage-backed securities issuers, but to no avail.
The agency requested a $4 million budget increase to $27 million. But the fiscal 2017 budget released Tuesday by the White House's Office of Management and Budget provides Ginnie Mae with $23 million, unchanged from the current fiscal year.
"This is still well short of what is needed long term to allow Ginnie Mae to meet its responsibilities to the mortgage industry as well as the taxpayers," Ginnie Mae President Ted Tozer said in a statement.
Last year, Congress cut the Obama administration's budget request for Ginnie Mae.
The secondary market agency guaranteed $432.4 billion in Ginnie Mae mortgage backed securities in fiscal 2015, which ended Sept. 30, up from $302.1 billion in the prior fiscal year. In the first quarter of fiscal 2016, Ginnie Mae issuance totaled $109.5 billion
Due to the high volume, Ginnie receives incentive payments, which allowed the secondary market agency to increase its workforce to 160 today from from 128 employees in fiscal 2015. The incentive payments are funded out of Ginnie's budget, the rest of which goes to the U.S. Treasury.
But Ginnie Mae is also going through a transition: FDIC-insured banks are dropping out of the program while nonbanks, which require more monitoring, are becoming the dominant MBS issuers.
"We need every additional person we can hire" to stay on top of nonbanks' businesses and financial condition, Tozer said in an interview Tuesday.
Nonbanks account for two-thirds of Ginnie Mae MBS volume, and the agency estimates it could be three-fourths by the end of this year.