Wherever you stand on Fannie Mae / Federal National Mortgage Assctn Fnni Me (OTCBB:FNMA) and Freddie Mac / Federal Home Loan Mortgage Corp (OTCBB:FMCC) reform, one thing that everyone seems to agree on is that the government should work to get more private capital back into housing financing. Fannie Mae and Freddie Mac issuances have taken the place of the private label mortgage backed securities (MBS) that all but disappeared after the financial crisis, but you don’t usually hear about the rapid growth of Ginnie Mae securities, which have an explicit Federal guarantee.

“Over the past housing cycle, the composition of mortgage origination has changed dramatically. Mortgages implicitly or explicitly guaranteed by the government are 90% of all loans originated, compared to two thirds before the crisis,” write Goldman Sachs analysts Hui Shan and Marty Young.


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