ration of Ginnie Maes budget through the
estimation of the credit subsidy rate for each
of Ginnie Maes programs.
Fiscal Year 2001 marked the release of PFAM
2.0, the first comprehensive redesign of the
model since its initial development in 1992.
Modeling improvements include a new
demand model for single family and multi-
family loan types, the use of regional variables
to model geographic variation in loan and
issuer performance as well as improved esti-
mation techniques.
A well designed and self-documenting
Oracle database has been added to streamline
the process of data updates and reduce turn-
around time. An equally important enhance-
ment is the addition of a relational database,
which enables expanded reporting features
such as drill-down graphs and charts, and
grants the user meaningful access to the
wealth of data available in the model.
PFAM 2.0 also employs a secure web-enabled
interface, making it easier for authorized
users to access the model, while eliminating
the need to install and update customized
hardware and software on individual users
terminals.
As is done each year, Ginnie Mae worked with
the FHA and VA to obtain the most current
and comprehensive loan level data. This data
supported detailed segmentation of loans
according to key risk indicators, including
loan type, loan size, loan-to-value ratio, and
region, enabling Ginnie Mae to map the cur-
rent risk profile of the collateral supporting
its guaranteed mortgage-backed securities.
Ginnie Mae obtained the most current eco-
nomic forecast, as well as a range of alterna-
tive scenarios to support Ginnie Maes use of
stress testing in risk management and capital
adequacy demonstration. Policy forecasts
were updated in coordination with key profes-
sionals and documentation from Ginnie Mae,
FHA and VA.
Liquidity
Ginnie Maes role in supporting expanded
affordable housing in America through sec-
ondary market vehicles is ongoing through
the use of the guaranty of the full faith and
credit of the United States Government. Liquid
assets further Ginnie Maes initiatives, and
these needs are driven by the development of
new secondary market vehicles, the timely
payment of pass-throughs to security holders,
and general operations. Through successful
cash management, program management and
commitment to cost containment, Ginnie Mae
has not been required to obtain appropriations
or other debt financing services.
The table below describes the composition and
maturity of Ginnie Maes Treasury securities:
Composition of Treasury Securities by Fiscal Year
Percent of Total
2001
2000
Due within 1 year
49%
21%
Due after 1-5 years
43%
60%
Due after 5-10 years
8%
19%
Ginnie Maes primary sources of cash are MBS
and Multiclass Guaranty Fee Income, Com-
mitment Fee Income and Interest Income.
After accounting for expenses and other fac-
tors, on September 30, 2001, Ginnie Mae
reported funds in the U.S. Treasury of $2.04
billion compared with $1.62 billion on
September 30, 2000. The increase in funds in
the Treasury is influenced by the Credit
Reform Act of 1990. This Act requires that
Ginnie Mae segregate funds held with the U.S.
Treasury between Liquidating and Financing
accounts. Funds received from activity origi-
nating prior to Fiscal Year 1991 are accounted
for in the Liquidating accounts, while funds
received from MBS fees for activity originat-
ing after Fiscal Year 1991 are maintained in
the Financing accounts. For Credit Reform
purposes, funds in the Financing account are
deposited into an interest bearing account
with the U.S. Treasury.
In addition to the funds in the U.S. Treasury,
Ginnie Maes investments totaled $6.56 bil-
lion, compared with $6.17 billion in the prior
year. Throughout 2001, Ginnie Mae used an
investment strategy that increased interest
income, while shortening its average maturity
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G i n n i e M a e A n n u a l R e p o r t 2 0 0 1