Ginnie Mae Enhances Risk Management Strategy

By Anuradha Kher, Online News EditorWashington, D.C.–The Government National Mortgage Association (Ginnie Mae) recently enhanced its risk management strategy, appointing a chief risk officer and reconstituting its issuer review board to ensure its securities continue to remain safe and stable.”Enhancing our risk management process is an enterprise-wide endeavor,” says Joseph J. Murin, president of Ginnie Mae. “This is a very turbulent time for the mortgage industry. While our business model significantly limits risk, the current environment and our rapid growth has presented a different set of challenges than we have ever faced before. We have to take a long, hard look at our strategy to ensure we continue on the right path.”Given the challenging state of the mortgage industry, Ginnie Mae’s explicit full faith and credit backing of the U.S. government has increased the number of lenders turning to the organization for safe harbor. In fact, the volume of Ginnie Mae’s monthly mortgage-backed securities (MBS) issuance hit $27 billion in June and $26 billion in July, more than triple what it had been for the same two months in 2007. The new enhancements will help Ginnie Mae keep abreast of the financial condition and program compliance of its issuers, thus minimizing risk to the corporation. The risk committee will promote an enterprise-wide approach to risk management. Working with the risk committee, the chief risk officer is responsible for establishing a risk governance structure and providing independent evaluation and oversight of risk management activities. The issuer review board is responsible for evaluating and overseeing issuer activities and compliance. A key element to Ginnie Mae’s enhanced risk management strategy is the appointment of Stephen L. Ledbetter as chief risk officer. Ledbetter, who brings 20 years of financial management experience, will continue serving as acting vice president of the office of mortgage-backed securities in addition to this appointment.