Introductory_Remarks_for_SMSS_Pre-Solicitation_Conference.docx

Michael Drayne: Introductory Remarks for MSS Pre-Solicitation Conference

October 12, 2012

Thank you for coming, and for your interest in what is one of Ginnie Mae’s most important procurement actions. I am the senior vice president of Ginnie Mae’s Office of Issuer and Portfolio Management, which is responsible for the execution of the Ginnie Mae program through our approved issuers.

Although probably everyone here is fully aware of this already, I am going to take a moment to explain the basis for this procurement.

Ginnie’s business model is actually very simple. We are, in essence, a monoline insurer – we guaranty, on behalf of the U.S. Government, that payments will be made to security-holders. These payments that we guarantee are an obligation of the entities that issue Ginnie Mae securities under this program, and who pledge all right, title and interest in the collateral loans to us in return for that guarantee. If they fail to fulfill their obligations, we have the right to seize this collateral. This procurement is to contract for the services we need to manage collateral in situations where this has occurred. This is the only way we acquire assets – market transactions are not part of our business mode.

It is an important consideration that these are situations we work hard to avoid. How often they arise, and how we will manage them when they arise, and even how long we will choose to maintain ownership of seized collateral – these are all questions that get decided based on circumstances as they develop, and on our evolving strategy.

I would like to introduce today’s presenters. Paula Smith, from the HUD Office of the Chief Procurement Officer, is going to discuss the procurement process and requirements. Leslie Meaux, who is the head of the Division – Monitoring and Asset Management -- within our office that has responsibility for managing Ginnie Mae assets, will discuss how this works at Ginnie Mae. And Karmen Young, from Leslie’s division, and John Crump, from our information management division, will discuss the statement of work itself. After these presentations we will have a short break, and then a Q&A period.

Now I will turn it over to Paula.