Ginnie Mae’s counterparty risk measures, including stress testing, are credit positive for the MBS sector but may be daunting for smaller participants, says Fitch Ratings in a new report.
Liquidity does not appear to be a cause of concern for the secondary market agency’s top nonbank issuers despite differences in how liquidity issues are addressed from firm to firm.
Ginnie Mae is in the early stages of developing stress tests for its MBS issuers to ensure they have enough liquidity to withstand adverse economic conditions.
Approval of new MBS issuers by Ginnie Mae fell drastically in 2018. Data provided by the agency showed that only eight out of 28 applications received last year were approved. In the year before, Ginnie approved 22 out of 31 applications.
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