approximately $41.6 billion in Platinum
products in Fiscal Year 2001. Fees amounted
to $17.7 million, representing a 51 percent
increase in fee income from the previous year.
Fees from REMIC securities amounted to $9.3
million on $25.8 billion in issuance for those
products, representing an increase of 9.4 per-
cent in fee income. Ginnie Mae recognized a
portion of the REMIC and Platinum program
fees in the period the fees are received, with
the balance deferred and amortized over the
remaining life of the financial investment.
In Fiscal Year 2001, Ginnie Mae issued a total
of $67.4 billion in its multiclass securities pro-
gram. The estimated outstanding balance of
multiclass securities (REMICs and Platinums)
included in the total MBS securities balance
at September 30, 2001 was $165.6 billion.
These guaranteed securities do not subject
Ginnie Mae to additional credit risk beyond
that assumed under the MBS program.
MBS Program and Administrative
Expenses
MBS program and administrative expenses are
incurred to carry out Ginnie Maes programs
and initiatives. These costs include contractor
services, personnel, compensation, printing,
and other administrative functions. MBS pro-
gram and administrative expenses increased
from $47.2 million in Fiscal Year 2000 to $49.4
million in Fiscal Year 2001, representing an
increase of 4.7 percent.
The increase in expenses is attributable to
normal expenses for managing its program
activities. Ginnie Maes ability to effectively
administer its programs is illustrated by the
decreased rate of total expenses as a percent-
age of total revenues from 5.7 percent in Fiscal
Year 2000 to 5.6 percent in Fiscal Year 2001.
Expenses as a percentage of total revenues
have ranged over the last five years from 5.6
percent to 6.5 percent. Additionally, MBS
program and administrative expenses as a
percentage of average RPB grew slightly over
the last five years from 0.0075 percent to
0.0082 percent.
The following chart depicts MBS program
and administrative expenses as a percentage
of gross revenues:
Expenses as a Percentage
of Gross Revenues
Fiscal Year
Percentage
1997
5.6%
1998
5.9%
1999
6.5%
2000
5.7%
2001
5.6%
Credit Related Expenses
Credit related expenses include Ginnie Maes
Provision for Loss and defaulted issuer portfo-
lio costs. The Provision for Loss is charged
against income in an amount considered
appropriate to maintain reserves for losses at
levels management determines adequate to
absorb potential losses from defaulted issuer
portfolios and program losses. Based on
managements assessment of reserve adequacy,
a Provision for Loss was made in Fiscal Year
2001 for $23.8 million. A similar Provision
for Loss was made in Fiscal Year 2000 for
$22 million.
Financial Models
Ginnie Maes Policy and Financial Analysis
Model (PFAM) is a comprehensive model
that allows Ginnie Mae to evaluate its finan-
cial condition, in terms of cash flows, capital
resource adequacy, and budget projections,
under an array of economic and financial
scenarios, modified by policy or programmat-
ic decisions. The PFAM incorporates Ginnie
Maes inherent operations-based risks with
modeling that employs economic, financial,
and policy variables to generate output that
assesses these risks and overall performance.
The information from PFAM supports
Ginnie Mae management in key financial
decisions such as allocating reserves against
future losses. This model also aids the prepa-
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