Ginnie Mae
Ginnie Mae | Definition
Government National Mortgage Association (GNMA). Ginnie Mae, a wholly-owned government corporation within the Department of Housing and Urban Development, helps establish secondary markets for residential mortgages, making mortgage investments attractive to all types of investors.
Through its mortgage-backed securities programs, Ginnie Mae helps to increase the supply of credit available for housing. Ginnie Mae guarantees securities backed by pools of mortgages --- these securities are called "mortgage-backed securities." The securities are issued by private institutions that Ginnie Mae approves. The mortgages are insured by the Federal Housing Administration (FHA), or guaranteed by the Veterans Administration (VA) or by the Rural Housing Service (RHS).
The Ginnie Mae guaranty assures security holders of receiving all payments due under the terms of the securities in a timely manner. These payments are guaranteed even if borrowers do not make their payments, or even if there is a default by an issuer in Ginnie Mae's MBS program. The payments consist of principal and interest due on pooled mortgages that back the securities, as well as any prepayments and early recoveries of principal on the pooled mortgages.
For more information, see the Ginnie Mae web site.
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