A Message from Terry Carr, Senior Advisor, Communications & Congressional Relations
Ginnie Mae posted a sound financial performance during fiscal year (FY) 2012. These strong results are indicative of the role we play in the U.S. housing finance system. Even during the financial crisis, Ginnie Mae consistently posted profits every year. And, 2012 was no exception.
- Solid Net Profit: The organization earned a net profit of $609.6 million. While this is down from $1.184 billion in FY 2011, the decrease can be attributed to a provision for losses of $431.6 million in FY 2012. Provisions for losses are a part of our risk management approach and another way that we help to mitigate risk to the taxpayer.
- Revenue Growth: Ginnie Mae’s revenues increased by 17.1 percent to $1.246 billion, up from $1.064 billion in FY 2011. Our operations are self-financed through a variety of fees, including $779.4 million in program income and $81.5 million in interest income from U.S. Treasury securities in FY 2012.
- Increase in Retained Earnings: Retained earnings grew to $16.37 billion, up from $15.76 billion in FY 2011. Our steady increase in earnings over the past few years will serve as a cushion against any possible future economic instability, shielding taxpayers from market fluctuation.
- Reduced Expenses: We continued to manage our expenses well, deploying our capital wisely and effectively. Expenses were reduced to $86 million in FY 2012, which is an 8.2 percent drop from $93.7 million in FY 2011. It is important to note that the costs associated with our mortgage-backed securities (MBS) program make up the majority of our annual expenses.
These financial highlights demonstrate Ginnie Mae’s role as a source of strength for the industry, as does our strong MBS issuance throughout the year. Ginnie Mae issued $388 billion in MBS, representing more than 23.5 percent of the agency market. While maintaining a high market share is not a priority for Ginnie Mae, it does emphasize how we have been helping to stabilize the housing market in a safe and efficient manner.
As we look to the year ahead, we remain keenly focused on the foundational components of our securitization program – transparency, efficiency and accountability. Reorganizing and increasing the Ginnie Mae team from 85 to 104 in FY 2012 has positioned us effectively to do just that. The reorganization has helped generate far-reaching changes that supplement, enhance and strengthen the overall composition of the organization. Above all, Ginnie Mae’s reorganization reflects an underlying effort to better serve our investors, Issuers, business partners and other key stakeholders.
Though the future of the housing industry remains uncertain, Ginnie Mae continues to provide the industry with direction and stability. The full faith and credit guaranty of the Ginnie Mae security keeps capital flowing from around the globe into the U.S. housing finance system and makes affordable mortgage lending possible. And, our consistent performance reaffirms just how much our guaranty matters.
Senior Advisor, Communications & Congressional Relations