Ginnie Mae creates risk committee and appoints CRO

The US government-sponsored mortgage entity Ginnie Mae has established a risk committee and appointed Stephen Ledbetter as chief risk officer.

Ledbetter will continue to serve as acting vice-president of Ginnie Mae’s office of mortgage-backed securities in addition to this appointment.

"This is a very turbulent time for the mortgage industry. While our business model significantly limits risk, the current environment and our rapid growth has presented a different set of challenges. We have to take a long, hard look at our strategy to ensure we continue on the right path," said Joseph Murin, president of Ginnie Mae.

The company said the moves were aimed at keeping Ginnie Mae abreast of the financial condition and programme compliance of its issuers, thus minimising risk to the corporation. Working with the risk committee, Ledbetter will be responsible for establishing a risk governance structure and providing independent evaluation and oversight of risk management activities.

Ginnie Mae’s news comes after two other US government-sponsored mortgage corporations – Fannie Mae and Freddie Mac – suggested they might scale back their operations after experiencing massive growth in their mortgage-backed securities (MBS) business since the start of the credit crisis in August 2007. It is believed this growth, along with MBS spreads increasing, has put pressure on their available capital for continuing operations.

See also: Freddie Mac and Fannie Mae to scale back mortgage guarantor business
Fed to support Fannie and Freddie