U.S. Government Increasingly on Hook for Non-Bank Mortgages, Despite Lack of Regulators and Preparedness
Ginnie Mae has struggled to keep tabs on the rapid growth of the lightly-regulated non-bank mortgage market. The wholesale mortgage guarantor’s unpreparedness may leave it struggling “to immediately respond to increased risks posed” by recent industry changes, according to a report published Monday by the Department of Housing and Urban Development (HUD) inspector general. “As a result, Ginnie Mae may not identify problems with issuers in time to prevent default,” the report warned. Ginnie Mae guarantees payments by issuers of certain mortgage-backed securities (MBS) to…