The government has recent introduced the newest FHA home loan, Ginnie Mae, which is now taking over where Fannie Mae and Freddie Mac left off.

We certainly have come to know Fannie Mae and Freddie Mac – probably more than anyone of us would have ever wanted to know – over the last year, so now it’s time to meet their partner in crime: Ginnie Mae.

Who is Ginnie Mae?

Ginnie Mae, also known as the Government National Mortgage Association, will be owned by taxpayers, just like its earlier counterparts, and its recent growth has put this new program in the spotlight.

Just recently, Ginnie Mae’s President, Joseph Murin, announced a monthly record of a whopping $43 billion in mortgage backed securities for June. And, if records keep getting broken by this new FHA loan, Ginnie Mae is poised to produce a mortgage exposure of more than $1 trillion by the end of 2010 – yes, that’s $1 trillion.

Given everything that has gone wrong in the past year with Fannie Mae’s subprime home loans, Ginnie Mae has essentially taken over the top position in terms of loan volume. It’s important to understand, however, that Ginnie Mae’s growth is directly related to the phenomenal growth of the FHA which, as of now, insures more than $560 billion in home loans. To give you a better idea of this number, about nine out of ten home loans are backed by the FHA.

What’s The Catch?

As we can all attest to from the past, the insurance programs of the FHA are not exactly known for being strict when it comes to its standards, which is why we all found ourselves essentially “buying” Freddie Mac and Fannie Mae – and their $400 billion debt – this past year.

The problem is that it appears that Ginnie Mae is following in the same footsteps as its cousins, Freddie Mac and Fannie Mae, regarding its standard insurance program, which includes backing home loans to buyers with little or no down payments and questionable credit ratings.

In fact, HUD recently issued a report detailing the lax insurance practices of the FHA. To give you an idea, HUD found that the FHA’s default rate has jumped to nearly 7%, which is nearly double the acceptable rate for lenders. In addition, it found that more than 13% of those were delinquent on their home loans by at least 30 days.

What does that mean for taxpayers?  If home values continue to plummet and a good majority of FHA home loans end up in default, we could, once again, find ourselves paying more nearly $60 billion in mortgage losses.