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How Ginnie Mae and Mortgage-Backed Securities Help You Get in a Home

Posted: October 15, 2010 at 10:12 pm 3,494 views One Comment

Ginnie Mae is a government guaranteed business that is responsible for helping people finance homes. Ginnie Mae has highly trained and knowledgeable work force working in the best interest of the families and mortgage lenders they help.

Ginnie Mae works with mortgage backed securities to help make housing affordable for millions of low and moderate income families in the United States. Ginnie Mae does this by putting global capital into the nation’s housing markets.

The Ginnie Mae guaranty allows mortgage lenders to obtain a better price for the mortgage loans in the secondary market. This allows the mortgage lenders to take the money they make and put it towards more mortgage loans that are available to more people. It is a way to increasing the amount of cash flow so that more mortgages are available for more families. In turn, this allows more people and families to own homes, otherwise they may have never considered.

Ginnie Mae does not actually buy, sell, or issue mortgage-backed securities loans. Ginnie Mae is responsible for housing investors that use their money for guaranteeing mortgage loans to the mortgage lenders. Ginnie Mae securities are the only mortgage-backed securities that are completely carried in full faith and credit guaranty by the United States government. Ginnie Mae is one of the safest investments for investors because of this reason. No matter the current financial and economic environment, this investment is a solid one.

Ginnie Mae guarantees investors timely payments of both principal and interest on mortgage-backed securities that are supported by federally insured or guaranteed loans. This mainly includes loans that are insured by the Department of Veteran’s Affairs and the Federal Housing Administration. Other guarantors or issuers of loans eligible as collateral for the mortgage-backed securities are The Department of Housing and Urban Development’s Office of Public and Indian Housing and the Department of Agriculture’s Rural Housing Service.

Ginnie Mae simultaneously helps families into homes and assists investors in getting guaranteed returns. Ginnie Mae investors get a share of all resulting cash flows, after of course the servicing and guaranty fees have been taken out.

So what exactly are mortgage-backed securities? Mortgage-backed securities are pools of mortgages used as collateral for the issuance of securities in the secondary market. MBS are commonly referred to as “pass-through” certificates because the principal and interest of the underlying loans is “passed through” to investors. The interest rate of the security is lower than the interest rate of the underlying loan to allow for payment of servicing and guaranty fees. Ginnie Mae MBS are fully modified pass-through securities guaranteed by the full faith and credit of the United States government. Regardless of whether the mortgage payment is made, investors in Ginnie Mae MBS will receive full and timely payment of principal as well as interest.

Ginnie Mae’s mission is to expand affordable housing in America by linking global capital markets to the nation’s housing markets. If you feel you can either benefit from their services, or would like to be an investor, contact the nearest location or check them out online. It could be just what you are looking for to get into a home or invest your money with other smart investors in large portfolios.
John R Blakefield is a mortgage and real estate specialist. For more information, articles, news, tools and valuable resources on home mortgages or investment loans, refinancing, debt solutions, visit this site: http://www.scourtheweb.com/mortgage/

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