The Ginnie Mae Experience

Report
PENNSYLVANIA HOUSING FINANCE AGENCY
How HFAs Are Financing
Homeownership in a Complex Time
Tom Corbett, Governor
Brian A. Hudson, Executive Director
AKA…
Crash
Burn
&
Learn
PENNSYLVANIA HOUSING FINANCE AGENCY
BC
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Whole loan bond program started in 1982
Funded Conventional and Government
Took over all servicing in mid 1990s
‘Off and On again’ self insurance fund; mid 90s and
again from 2009 – 2012
Life was good. ‘Only game in town.’
Biggest problem = not enough volume cap and how
much spread
PENNSYLVANIA HOUSING FINANCE AGENCY
The Crash
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No more interest rate advantage
No more AA rated PMI companies
Challenge to keep DPA program alive
No other funding sources except MRB
VRDO’s
Downgrading and lack of liquidity providers
SCARY TIMES!!!
PENNSYLVANIA HOUSING FINANCE AGENCY
The Burn
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Adverse selection
 Kept
MRB alive, but higher rates
 No overlays = mission served
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Refi boom = run off of good MRB loans
Not feeding conventional loans to MRB program
Tsunami of new regs to incorporate
Attrition of lender network
PENNSYLVANIA HOUSING FINANCE AGENCY
The Learn
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HFA network was invaluable
Became approved Ginnie issuer in spring of 2009
Rolled out new program in May; no MRB requirements
 ‘Hedge’ was a higher rate
 Learning curve to switch to MBS
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NIBP/Fed 1st Timers’ Credit 2009-2010
Started secondary/TBA program in 4th Q 2011
Rolled out Fannie program in May 2012
Started doing FHA refi’s in 1st Q 2013
Rolled out MCCs in July 2013
PENNSYLVANIA HOUSING FINANCE AGENCY
Now what? Programmatic issues.
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How do we continue to serve our mission, add value,
and be different?
 Programs:
MCCs, DPA, partnerships, underwriting
flexibilities, counseling
 ‘Friendly’ investor; less buybacks, accessible
 Servicing
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More complicated to explain programs.
More time reviewing files and fixing things
QC!!!
PENNSYLVANIA HOUSING FINANCE AGENCY
Now what? Financial issues.
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More money, more problems
Performance issues in bond program
 Runoff,
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adverse selection, less conventional
Versatility is great, but it’s a balancing act.
TBA or MRB?
 Both
 MCC
program = competition
 Cash up front or over time
PENNSYLVANIA HOUSING FINANCE AGENCY

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