We audited the Government National Mortgage Association’s (Ginnie Mae) management of its portfolio of federally guaranteed mortgage-backed securities (MBS). We initiated this audit because of our internal monitoring of the Ginnie Mae portfolio as well as the issuance of a Financial Stability Oversight Council report in 2024 on the rising risks presented by nonbank mortgage companies. Our audit objective was to assess Ginnie Mae's evaluation of nonbank issuer concentration risk.
Ginnie Mae’s portfolio experienced a rise in nonbank concentration risk. Specifically, a few nonbank mortgage companies hold a large percentage of Ginnie Mae’s portfolio of guaranteed MBS. However, Ginnie Mae does not formally assess whether the risk impacts its operations, existing internal controls, or its ability to meet its agency goals. If this continues, it could complicate Ginnie Mae’s ability to effectively monitor or respond to any failures of the largest nonbank mortgage companies.
We recommend that the President of Ginnie Mae perform an assessment of concentration risk and take appropriate action based on the results.
