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Ginnie Mae's Troubling Endorsements
Little-known Federal Agency Backed Dozens of Lenders with Checkered Pasts
WASHINGTON - December 10 - t least 36 mortgage companies with histories of civil suits, reckless lending, fines, or other sanctions from regulators have for years received the blessing of Ginnie Mae, the government's huge mortgage guarantor, according to a new collaborative investigation by the Center for Public Integrity and The Washington Post. The story, "Ginnie Mae's Troubling Endorsements," features an interactive database of troubled mortgage firms that have been endorsed by Ginnie Mae.
Ginnie Mae authorizes lenders to bundle mortgages into securities and sell them to investors - backed by U.S. taxpayer funds. More than a dozen lenders with Ginnie Mae's endorsement have made loans that are now delinquent at rates far in excess of what regulators consider acceptable, according to the investigation. Sixteen of the lenders have been cited by various federal regulators for unsafe banking practices, insufficient capital, or other violations.
The Department of Housing and Urban Development's inspector general says Ginnie Mae is too accommodating of problem lenders and Ginnie Mae's outside auditor recently reported a "significant deficiency" in the agency's internal controls.