Ginnie Mae ends 2020 with its strongest month for MBS issuance ever

After it plateaued in the previous month, issuance of mortgage-backed securities insured by Ginnie Mae grew in December, setting a new record as refinancing and overall originations surged.

The volume of Ginnie securities issued in the last month of 2020 exceeded $81.7 billion, marking the first time more than $80 billion has been issued in a month. The previous record for one month, set in August of 2020, was nearly $78 billion.

“Investors demonstrated widespread demand for Ginnie Mae securities in December and throughout 2020,” Executive Vice President Eric Blankenstein said in a press release issued Friday. “During a year of unprecedented business volume, Ginnie Mae seamlessly executed its mission to safely provide consistent liquidity to the government mortgage loan market, supporting the housing needs of millions of homeowners and renters.”

Ginnie financed homes for more than 289,000 households during the month.

The government bond insurer, which is an arm of the Department of Housing and Urban Development, also recorded a record number of Platinum transactions in December 2020 at $3.5 billion. In these transactions, multiple Ginnie Mae-insured loan pools with similar rates, terms and maturities are combined into a single security.

There has been anticipation that distress related to the coronavirus would increase the overall level of repooling activity. As a result, temporary restrictions were imposed on it last year, but Blankenstein noted in a post on Ginnie’s website earlier last week that it plans to “amend or retire many of the temporary programs put in place in 2020” in consultation with stakeholders this year.

While monthly issuance rose to a record in December, the outstanding principal volume of Ginnie Mae MBS was essentially flat compared to a month earlier, and down slightly compared to the end of 2019.

There were $2.11 trillion in outstanding securities as of Dec. 31, 2020, roughly even with what was seen at the end of November. At the end of 2019, there were $2.118 trillion in securities outstanding.