Affordable housing advocate moves closer to top job at Ginnie Mae

WASHINGTON— President Biden’s nominee to lead Ginnie Mae pledged to lawmakers Thursday that if confirmed, she would do her part to expand access to credit and provide the critical capital and liquidity needed to finance affordable housing as the U.S. faces record-high demand for homes.

Alanna McCargo, currently a senior advisor at the Department of Housing and Urban Development, told the Senate Banking Committee in a hearing to examine her nomination that while her role in slowing home price appreciation would be limited at Ginnie Mae, she would ensure that the agency would continue to be a reliable backstop to investors in mortgage-backed securities. That support in turn ensures that borrowers in government-backed programs are able to capture lower interest rates on home loans.

“Far too many people do not get the opportunity to plant seeds of ownership because housing is grossly unaffordable, it’s impossible to save or they lack resources or don’t have parents who can help them get started,” McCargo said in prepared remarks to lawmakers. “Government mortgage programs help enable homeownership opportunity.”

Ginnie Mae has not had a Senate-confirmed president since 2017 — a vacancy that outlasted the entire Trump administration. If confirmed, McCargo would be the first woman to head the agency since its creation in 1968.

Although Sen. Pat Toomey, R-Pa., the ranking member of the Senate Banking Committee, briefly raised concerns about McCargo’s involvement with implementing the crisis-era Home Affordable Modification Program — which was created to benefit distressed homeowners but had a higher than expected redefault rate — most lawmakers appeared supportive of her nomination and were interested to hear what solutions she might have to address the lack of affordable housing.

“There are businesses that can't expand because of the lack of workforce housing,” said Sen. Jon Tester, D-Mont. “There are startups that can't start up because of the lack of workforce housing, and then the houses that are there are really expensive, because demand has driven the price way up over the last 18 months.”

McCargo agreed that families are “incredibly cost burdened by the cost of their housing,” whether they are homeowners or renters.

“This is an issue that if confirmed, my role in being able to affect the home price appreciation and the things that are happening is limited, but we are going to be there,” she said. “Ginnie Mae is there to support millions of families by providing capital, liquidity and making sure that new rental housing projects that are financed and new homeownership opportunities that require mortgages have the capital that they need.”

McCargo also committed to working with the Biden administration to prevent avoidable foreclosures as government forbearance programs wind down and the economic recovery from the COVID-19 pandemic continues, noting that Ginnie Mae has been a part of ongoing interagency work ensure borrowers remain in their homes.

“I believe that if confirmed, I would continue to work with Ginnie Mae and the teams in the interagency working group to ensure that those families find security and have a healthy recovery from this crisis,” she said.

McCargo was also asked if she would continue with Ginnie Mae’s strategic road map, called Ginnie Mae 2020, to modernize its systems and improve its management of counterparty risk. She committed to carrying out that plan, noting that “a lot of the work … is still underway.”

“The efforts to modernize the securitization platform are crucial," she said. "We need to have state-of-the-art technology that runs this business, and the counterparty risk management work that this team has put in place over the last five years, and even very recently in the last two to three years, is critical and has to be second to none.”