Ginnie Mae's new president, Robert M. Couch.

While he may have just recently been installed as president of the Government National Mortgage Association, Robert M. Couch is no stranger to the government-sponsored enterprise (GSE) more commonly known as Ginnie Mae.

For years as a mortgage banker, Couch got to know Ginnie Mae quite well from the outside. But following his confirmation by the Senate in June, he's now not only on the inside, but he's in the top slot. The job had been vacant since December 2004 when former president Ronald Rosenfeld left to become chairman of the Federal Housing Finance Board.

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As Ginnie Mae's president, Couch administers Ginnie's $404 billion mortgage-backed securities (MBS) program and $125 billion real estate mortgage investment conduit (REMIC) program, as well as oversees its mission to make affordable housing a reality for millions of low- and moderate-income households across America by channeling global capital into the nation's housing markets.

Prior to his selection as president of Ginnie Mae, Couch served as president and chief executive officer of New South Federal Savings Bank, Birmingham, Alabama, and as managing director of Collateral Mortgage Ltd., also in Birmingham.

Couch served as Mortgage Bankers Association (MBA) chairman from 2003 to 2004, while also serving on MBA's Blue Ribbon Task Force responsible for defining the proper role of Fannie Mae and Freddie Mac in the mortgage industry. In addition, he was a member of Fannie Mae's National Advisory Council.

He received both his bachelor of science degree in business administration, with a concentration in accounting, and his law degree from Washington & Lee University, Lexington, Virginia. Following law school, Couch clerked for Lewis F. Powell Jr., associate justice of the U.S. Supreme Court, and John M. Wisdom, U.S. Court of Appeals for the Fifth Circuit.

Mortgage Banking caught up with Couch following his first month on the job as Ginnie Mae's president.

Q: In a town where politics seem to matter at least as much as policy, how has your previous business experience prepared you to run a government agency and to serve at the pleasure of the president? Or, in other words, how did a nice mortgage banker like you end up in a place like this?

A: That's a good question. I would say that my experience with MBA, where I spent a good deal of time in Washington, prepared me better for the political aspects of this job than certainly being the president of a thrift in Alabama did.

It certainly is a change from being a CEO of a bank, but fortunately Ginnie Mae is less of a political animal than most here in Washington. I think I'll do just fine.

Q: As you now find yourself in charge of an agency you once dealt with from the outside, based on your previous experience, what about Ginnie Mae do you most want to "fix"? Or, what about Ginnie's programs and procedures works, and what aspects will you seek to improve, modify or discard?

A: Well, fortunately, Ginnie Mae is a very well-run organization. One of the things that I was able to do during the months while I was waiting on the Senate to vote [on my confirmation] was that I had an opportunity to observe the team at work.

I am fortunate in that it's a great group of folks and it's a well-run organization. As with any organization, there certainly are challenges.

In fact, you guys ran an article, it was probably 18 months ago [see Mortgage Banking, April 2005, p. 32] on the fact that Ginnie Mae's market share has been in a free-fall for some time now. Much of that is due to the fact that FHA's [the Federal Housing Administration's] market share has been in a free-fall.

I'm happy to report, though, that we're beginning to see some stabilization in that and, in fact, some improvement. We have had now for three months in a row a positive net issuance. That's the first time that that has happened since all the way back in 2001. In fact, in four of the last six months, we've had positive net issuances.

I'm hopeful that we're beginning to see some stability in our portfolio. My goal is to do what I can to continue that improvement. There are several things that are on the agenda in that regard.

First and foremost is FHA modernization. I have committed to FHA Commissioner Brian Montgomery that I'll do whatever I can to support his efforts to reform and modernize FHA. That would be the single biggest thing that could help us continue this progress on the market-share front.

Q: How much of any planned "fixing" do you anticipate will require input or legislative cooperation from Congress?

A: Well, the truth of the matter is that the [FHA] commissioner has already done what he can through regulatory channels to modernize FHA. It really is in Congress' court.

There is a bill [the Expanding Homeownership Act of 2006--H.R. 5121 in the House and S. 3535 in the Senate] to make changes to the FHA programs, giving more flexibility [for the programs] to be competitive. So it's really a legislative effort now.

Q: Can Ginnie Mae be more than a cheerleader or bystander in the debate over FHA modernization? For example, is Ginnie preparing any research or reports for Congress to help plead the case and add to the immediacy of the need for reform?

A: Most of that data is being produced by FHA. They're the ones that are the repository of a lot of that information. Really it's a matter of me trying to use the bully pulpit to the extent that I have one to get the word out.

It's a two-pronged message. One is the need for legislation. The other is to make people aware that there have already been improvements to the FHA program, and that to the extent that you may have been an FHA lender in the past and you may have gotten away from it because of the difficulties that the old programs entailed, you should take a fresh look.

Good changes have been enacted by FHA, and it's worth looking at the program again if you've gotten away from it.

One of the things that [has been] serendipitous about my efforts to preach positive sermons about FHA: I do have connections with the mortgage baking industry. I have been somewhat successful in arranging to get in front of groups of mortgage bankers and community bankers, and I plan to continue that.

I think I bring a little credibility to this. I've been there before. In my role as CEO of a thrift, we were a pretty big government lender. About 30 percent of our business was government loans, so I know what I'm speaking about and I think I bring some credibility to the table.

Q: So you're hoping that both as Robert Couch, one-time mortgage banker, and as the president of Ginnie Mae, a presidentially appointed government official, you can add your voice to the chorus and do your part to advance FHA reform?

A: That's exactly my hope.

Q: If FHA reform is not passed this year, do you expect you can build upon this year's gains during the next Congress, or do you fear that momentum or the appetite for reform will be lost with the passage of time and with a new Congress?

A: My expectation is that if it doesn't pass this year, the fight will continue next year. Nothing will change. If anything, the hope that the FHA commissioner has of being able to design programs that can bring good products to low- to moderate-income families will continue.

One hope is that by reforming FHA products, we can address lending issues. If you can get people into FHA products, I think by design you prevent them from being susceptible to predatory lending practices or abusive lending practices.

Q: If FHA modernization does not come to pass for whatever reason, where does that leave Ginnie Mae? Are there any reforms or initiatives you could advance independent of FHA modernization that would help advance Ginnie's goals?

A: Absolutely. In fact, right now we are well into a project to try and securitize Home Equity Conversion Mortgages--the HECMs. It's a market that's seen explosive growth over the past few years, and when you look at the demographic data it should continue to grow rapidly for the coming years.

And it's a wonderful product. I'm a huge fan of homeowner-ship. When I was chairman of MBA, that was one of the themes that I constantly preached when I was on the road giving speeches for MBA. Homeownership is a good thing because it's good for communities. It's good for families because it's a great tool to accumulate wealth--but it doesn't do any good to build the equity in your home if you can't get at it.

HECM is a wonderful way for seniors to begin to extract equity from their homes. To the extent that Ginnie Mae can help make that market more efficient by guaranteeing the securities that are made up of those loans, I think it's a worthwhile cause for us to pursue and it's very consistent with the mission of Ginnie Mae.

Another initiative that I have begun to undertake is to try and increase the awareness in foreign markets of the quality of Ginnie Mae securities. I'm trying to bring more foreign capital to bear, and hopefully thereby reduce the cost of capital to homeowners in this country.

Ginnie Mae securities have the full faith and credit of the United States government behind them. That makes them a wonderful investment for central banks that need safety, and I'm planning to spend some of my time getting that message out. In fact, we're already beginning to set up meetings with foreign investors.

Q: So do you have a road show planned or a marketing blitz or something else in the works to that end?

A: I've already been to New York. That was my first stop after being sworn in and visited with eight investment banks representing clients overseas. I have blocked out a week in August that I'm going to spend on the West Coast meeting with investors, most of whom are foreign-based investors.

Then the schedule gets busy with conferences here in the United States, but my hope is that sometime in the fall I can arrange a trip to Europe and a trip to Asia to further that effort.

Q: Looking ahead: In addition to FHA reform, what would you say are Ginnie Mae's top three challenges for the remainder of 2006 and into 2007?

A: Well, we've got an ongoing program right now to modernize our technology. That process will unfold this fall and really in all of 2007, but we've got some fairly big milestones in early 2007 where we're trying to wed all of our systems into one database to make it easier for our customers and our partners to access information, to make that information better.

Next year we'll be able to provide loan-level disclosures. At least that's our hope. That will make our securities even more valuable, we believe. So technological improvement will be an ongoing project for us over the next 18 months. Beyond that, I'm tying to keep focused on the matters that I've already discussed.

Q: Even as Fannie Mae and Freddie Mac have seen their market share made smaller by the nonconforming market, do you see your role to restore Ginnie Mae's major market-share position or to carve out a new role--perhaps as a permanent niche player?

A: I don't anticipate that even with FHA reform our target market will change. By our charter, we're focused on the low- to moderate-income market. There's plenty of room there. If we are focused on continuing to grow the homeownership rate in this country, that's where the sweet spot is--the low- to moderate-[income] market.

One of the byproducts of that is we should be able to narrow the gap between minority and non-minority homeownership rates. Those are all parts of the same goal, if you will.

Q: During your confirmation hearing, you talked about a "growing area" being the securitization of FHA multifamily loans, and said that if confirmed you would "continue to look for creative ways to improve the market for multifamily securities." Can you list some specific actions that Ginnie Mae is or will be taking to achieve this?

A: I will, in a roundabout way. The multifamily program is the one area where Ginnie Mae has continued to grow market share consistently over the past several years. Our numbers suggest that we are already seeing virtually all FHA-[insured] multifamily loans going into Ginnie Mae securities. So there's not a whole lot of room there.

Q: As you continue to settle into your new position, what timeline or benchmarks have you set for yourself for measuring results?

A: The truth of the matter is that I've got a pretty short tenure here. When I first met with [Department of Housing and Urban Development (HUD)] Secretary [Alphonso] Jackson, I committed that I would be here until President Bush's term is up--and I plan to do that.

It's a little difficult to set benchmarks without knowing if we're going to get the legislation--the FHA legislation--because that will change everything. It has the potential to really put us into--what's that term from Star Trek, "warp speed"?--if we can get that done.

Q: Can we check in with you in a year's time to see how things are going?

A: That would be great. You'll keep me honest. If I have to talk to you again in a year, I'd better get to work.

Charles Wisniowski is a correspondent for Mortgage Banking.