Ginnie Mae
Ginnie Mae
Definition
☆ Gin·nie Mae (jin′ē mā′)
noun
- Informal Government National Mortgage Association: a federal agency which purchases mortgages from lending institutions with funds raised by the sale of government-backed securities
- pl. Gin′·nie Maes′ any of the securities issued by this agency
Ginnie Mae Finance Definition
The
common nickname for the Government National Mortgage Association (GNMA). Ginnie
Mae guarantees pass-through securities that are backed by pools of home
mortgages. Ginnie Mae occasionally comes under fire for its unfair competitive
advantage over private businesses. Because Ginnie Mae was started by the
federal government but functions as a private business, there is a perception
that in the event of a default the U.S. government would bail out Ginnie Mae.
That perception allows Ginnie Mae to borrow funds in the market more cheaply
than its competitors. There have been no defaults to determine what the actual
procedure would be.
