NEW YORK, July 24 (Reuters) - Ginnie Mae’s securitization of jumbo mortgages has reached $3 billion in the four months since the government approved a temporary increase in the size of home loans that the Federal Housing Administration could insure.
The Economic Stimulus Act of 2008 allowed FHA to raise its loan limits from $362,790 to $729,750 in some areas of the country through the end of this year. FHA loans are a primary source of collateral for Ginnie Mae bonds.
Ginnie Mae, the government-owned issuer of mortgage-backed securities formally called the Government National Mortgage Association, in April started a multiple-issuer security under the Ginnie Mae II MBS program to accommodate these new jumbo loans.
Since the program began, issuers securitized $17 million in FHA jumbo loans in April, $331 million in May, $1.089 billion in June and $1.470 billion in July, Ginnie Mae said in a news release on Thursday.
“It is providing much-needed liquidity to the jumbo market and at the same time reducing homeownership costs for families living in high-cost areas,” Joseph Murin, president of Ginnie Mae, said in the release.
Ginnie Mae, created in 1968, guarantees more than $2.6 trillion in MBS. (Reporting by Lynn Adler; Editing by Jonathan Oatis)