U.S. flag

An official website of the United States government Here’s how you know

The .gov means it’s official.

Federal government websites often end in .gov or .mil. Before sharing sensitive information, make sure you're on a federal government site.

The site is secure.

The https:// ensures that you are connecting to the official website and that any information you provide is encrypted and transmitted securely.

Document

We identified gaps in Ginnie Mae’s guidance and process for troubled issuers.  Ginnie Mae made progress in developing an issuer default governance framework, but has not (1) defined its authorities for marketing troubled portfolios; (2) formalized guidance for how to identify potential buyers before extinguishment; (3) established expectations for determining portfolio value, price before sale, and evaluation against other options or (4) included a step to evaluate prospective purchasers’ ability to absorb an extinguished portfolio.  Additionally, we found Ginnie Mae had implemented our previous recommendation to develop and implement controls to determine the total impact of a large- or multiple-issuer default, the maximum-size default Ginnie Mae could adequately execute, and individual issuers’ ability to adapt to changing market conditions, but there was a gap related to the semiannual capacity reports submitted by master subservicers (MSS).

Recommendation Status Date Issued Summary
2023-KC-0003-001-A Closed March 28, 2023

Update its policy and procedures to define its authority for marketing troubled issuer portfolios and the conditions that must exist to extinguish issuers using rapid relocation.


Status

As of October 2023, Ginnie Mae planned to incorporate more detailed guiding principles within the default strategy procedures clarifying selection criteria for each termination or extinguishment method, specifically rapid relocation. Ginnie Mae also plans to offer additional training to its employees. The final action target date is May 30, 2024.


Analysis

To fully address this recommendation, Ginnie Mae must provide evidence that it has updated and implemented its policies, procedures, and training to clearly define its authority for marketing troubled issuer portfolios and the conditions that must exist to extinguish issuers using rapid relocation.

Implementation of this recommendation will result in Ginnie Mae more effectively protecting its portfolio.

2023-KC-0003-001-B Open March 28, 2023

Update its policy and procedures to define what type of information Ginnie Mae may disclose and how it will handle protected information before extinguishment.


Status

As of October 2023, Ginnie Mae planned to incorporate the existing Ginnie Mae Confidential Information Policy into its Default Playbook and identify and log information that can be selectively shared in rapid relocation execution. The final action target date is May 30, 2024.


Analysis

To fully address this recommendation, Ginnie Mae must provide evidence that it has updated its policies and procedures to define what type of information it may disclose and how it will handle protected information before extinguishment. Ginnie Mae stated that it is currently on track to fully address the recommendation on time.

Implementation of this recommendation will result in Ginnie Mae more effectively protecting its portfolio.

2023-KC-0003-001-C Open March 28, 2023

Update its Policies and procedures to define how Ginnie Mae will determine the portfolio value and price before Sale.


Status

As of October 2023, Ginnie Mae planned to update its valuation models, timing, and pricing strategies within its rapid relocation procedure. The final action target date is May 30, 2024.


Analysis

To fully address this recommendation, Ginnie Mae must provide evidence that it has updated its policies and procedures to define how it will determine the portfolio value and price before sale. Ginnie Mae stated that it is currently on track to fully address the recommendation on time.

Implementation of this recommendation will result in Ginnie Mae more effectively protecting its portfolio.

2023-KC-0003-001-D Open March 28, 2023

Update its policies and procedures to define how Ginnie Mae intends to identify and evaluate prospective buyers to ensure its ability to absorb the extinguished portfolio before executing the purchase and sale agreement.


Status

As of October 2023, Ginnie Mae planned to incorporate impact analysis evaluation of each prospective buyer to confirm compliance post-transfer. This will include key portfolio indicators and will mirror similar activities currently performed on select standard pool transfer participants. The final action target date is May 30, 2024.


Analysis

To fully address this recommendation, Ginnie Mae must provide evidence that it has updated its policies and procedures to define how it intends to identify and evaluate prospective buyers to ensure its ability to absorb the extinguished portfolio before executing the purchase and sale agreement. Ginnie Mae stated that it is currently on track to fully address the recommendation on time.

Implementation of this recommendation will result in Ginnie Mae more effectively protecting its portfolio.

2023-KC-0003-002-A Closed March 28, 2023 Assesses what information Ginnie Mae needs from the MSS to ensure that they have the capacity for a large- or multiple-issuer extinguishment.
2023-KC-0003-002-B Closed March 28, 2023 Prescribes how the contracting officer representative will review information provided by the MSS and provide actionable feedback to ensure MSS readiness.