Ginnie Mae’s Sam Valverde on tackling liquidity hurdles

Ginnie Mae has been able to provide continuity on several key initiatives since Sam Valverde stepped in as acting president last month, and he says those aimed at sustaining mortgage liquidity will be the agency’s top priority as it moves forward.

This includes steps that may counter interest-rate related cash-flow strains on the growing number of nonbanks it works with, so that these mortgage-backed securities issuers can keep supporting the MBS that Ginnie guarantees, a key source of funding for government loans.

In an interview about what’s on Ginnie’s agenda for the future, Valverde touched on the recent flexibility added for extended term MBS to that end, and discussed broader ways it’s supporting independent mortgage banks that lack some liquidity resources depositories have.

He also explained how identifying aspects of Ginnie’s existing MBS that might appeal to investors interested in bonds with environmental, social and governance criteria could expand buyer interest in a market that’s lost a key investor as the Federal Reserve has pulled back.

Another potentially liquidity-boosting initiative Valverde weighed in on was how one of the legislative concepts discussed in a recent Financial Stability Oversight Council study could work: an expansion of its pandemic-era Pass Through Assistance Program.

A condensed version of his responses to questions from this publication follows.