Ginnie Mae’s inadequate response to the rapid increase of nonbank issuers may make it difficult for the agency to identify issuer problems in time to prevent default, warned the Department of Housing and Urban Development’s inspector general in a recent audit report. Specifically, the IG report said the agency failed to implement policies and procedures for managing issuers in a timely manner and tried to supervise them without a written default strategy. Furthermore, the report claimed Ginnie did not promptly assess and address the risks posed by nonbanks. Ginnie Mae questioned the findings, contending it “has done a more than credible job adapting to the new environment” despite the pressure on its resources. Ginnie’s issuer base had changed dramatically over the last couple of years as many banks either left or reduced their exposure in the FHA market for fear of being slapped with a ...