Can GNMA MBS default?

Discussion in 'Economics' started by surfer25, Nov 29, 2011.

  1. Hi,
    I have some friends who believe that it is just a matter of time until the GNMA funds default. Is this a real possibility? If so, what might occur to bring that about.

    Also, is there a set pool of capital set aside to pay interest and principal on GNMA backed mortgages and if so, can this pool of capital run out and cause Ginnie Mae to default on its guarantee to GNMA insured MBS investors?
    Thanks.
     
  2. Anything is possible... However, GNMA is explicitly guaranteed by the US govt.