Why Ginnie Mae Plans to Stress-Test Its Issuers

Ginnie Mae spotted the red flags at W.J. Bradley soon enough to have a new loan servicer in place by the time the nonbank mortgage lender failed in March. There were no interruptions in cash flow from the pools of loans Bradley had originated to the investors in the bonds Ginnie guaranteed. The agency had done had its job. But Ginnie wants go one step further in its monitoring of issuers’ operations. It plans to model how the liquidity of companies that issue its mortgage-backed securities would look under stress, so it can troubleshoot more effectively.

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