HousingWire: Don’t let the upcoming Ginnie Mae stress tests stress you out

Ten years after the housing and mortgage-market crash and subsequent reforms, there is renewed concern about the liquidity risk in the mortgage market. According to a team of researchers at the Brookings Institution who published a research paper in 2018 entitled “Liquidity Crises in the Mortgage Market,” the threat is now greater than ever, as nonbank mortgage companies increase their share of the market without having the resources to support stress scenarios.

Ginnie Mae, in the Ginnie Mae 2020 position paper, seems to be agreeing with this assessment of increased counterparty risk as they suggest a series of stress tests that they will be imposing on nonbank lenders in the near future.

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