How to handle Ginnie Mae investments (edits)

Phil H.

I have some Ginnee Mae investments that pay a "Principal Payment" each month. I can add an personal income category called "_Principal Payment" but how can I add that category to the Investment Category Group or am I stuck with the pre-canned ones?

Tom Young

https://community.quicken.com/discussion/comment/20373785#Comment_20373785

A Ginnie May is a pool of mortgages and what you own are "units" (or some similar term) is a specific pool of mortgages. Mortgages pay both principal and interest, and that's what you're receiving, minus the management fee. The number of your units (shares) doesn't change from week to week, only the principal balance of the pool changes as borrowers make payments or pay off loans. Just like any security the price (quote) changes from day to day. I don't expect you'll get downloads with correct quotes from Schwab - others haven't - so you'll have to look that up from time to time at the Schwab site.

Tom Young

"I can add an personal income category called '_Principal Payment'"

The pay down of mortgage notes is not an income and, accordingly, should not be styled as a Category (Quicken term for what most accountants would call "an income or expense account.") Principal payments represent a return of capital and should be accounted for as such. You may find Ginnie Mae's somewhat difficult to deal with in Quicken when it comes the changes in prices.

bmciance

A principal payment shouldn't hit a category, which in Quicken are only Expenses or Income. A principal payment is a reduction of your cost of the investment and not an expense or income. You should enter it as a sale or bonds sold. It works like a home loan where you pay principal and interest. In this case you are receiving the principal.

Phil H.

@bmclance: I understand this a little more but in the info from Schwab, all I get is the Principal payment amount. Thus I don't know the price of the bond. Do I use the orginal price then and let quicken determine the number of shares?

QWinUser

The payments you are receiving are actually both principal and interest.

Each Ginnie Mae pool should have a CUSIP number. If you have it, you can get interest rate information on your Ginnie Mae pool.

If you don't have it, you can find it at ginniemae.gov. Click on "Issuers" and then Issuer's Tools".

The taxable interest is reported on Form 1099-INT. The principal piece of the payment pays down the pool.

Phil H.

OK, I'll check that out. Each month I get a statement showing interest earned as well as the Principal Payment from Schwab. Quicken puts the interest into "IntInc" and puts Principal paid as as Deposit so my cash increases by that amount. My whole purchase of trying to understand this is to have a custom report showing Interest and Principal earned by each GinnieMae. I might be asking too much.

QWinUser

@Phil H. - what you are asking is not too much. The dilemma is how we can best set it up based on how you have it currently running.

1. How many Ginnie Maes do you have?
2. Are they set up as securities, or were the purchases simply recorded as cash withdrawals?
3. When did you purchase them?
4. When they were purchased did you get a confirm showing purchase price, par value, face value? Was the price 100, or something close to that?
5. Are they all in one brokerage account?
6. How are they updated? Manually? Downloaded?

Here is the situation - each Ginnie Mae should be set up as a security. The interest needs to be attached to the security by the fund ID or CUSIP. How it's run ongoing depends on how it was initially purchased (what price was used), and how you are getting updates from Schwab.

It sounds like currently the payments from Schwab are sitting in cash without any designation from which Ginnie Mae they belong to. Is that correct?

Tom Young

https://community.quicken.com/discussion/comment/20373785#Comment_20373785

A Ginnie May is a pool of mortgages and what you own are "units" (or some similar term) is a specific pool of mortgages. Mortgages pay both principal and interest, and that's what you're receiving, minus the management fee. The number of your units (shares) doesn't change from week to week, only the principal balance of the pool changes as borrowers make payments or pay off loans. Just like any security the price (quote) changes from day to day. I don't expect you'll get downloads with correct quotes from Schwab - others haven't - so you'll have to look that up from time to time at the Schwab site.

Phil H.

@QWinUser :

I'll try to answer

1. How many Ginnie Maes do you have? 8
2. Are they set up as securities, or were the purchases simply recorded as cash withdrawals? Securities using accounts cash
3. When did you purchase them? March thru July 2023
4. When they were purchased did you get a confirm showing purchase price, par value, face value? Was the price 100, or something close to that? Yes
5. Are they all in one brokerage account? Yes
6. How are they updated? Manually? Downloaded? Download.

The principal payment that comes in each month shows up in Quicken as a Deposit. The Interest earned shows up as Interest Income.

So all I want to do is run a report that will show by security the interest and principal paid each month.

QWinUser

@Phil H. - Just a few more questions and then I think we can get you set up so you can run reports and get information on each Ginnie Mae, the way you want. You mentioned that you get monthly statements from Schwab. I am hoping that they will have the information we need for each of the 8 Ginnie Mae.

1. CUSIP or MIP number, or any other identifying number for each Ginnie Mae.
2. The initial purchase amount. Does the purchase have any units (shares) associated with it?
3. Is there any price information on the statements?
4. Do the statements show a current balance for each Ginnie Mae? If so, does it look like the balances are going down by the monthly principal amount you are receiving?
5. What other financial information do the statements show that I haven't mentioned?

I think after these questions are answered, I would know how we can proceed.

Here is an example of CUSIP or MIP numbers for Ginnie Maes

If you can't find either for your Ginnie Maes, we can just make up a fund ID for each of your Ginnie Maes.

Phil H.

@QWinUser : Well with your input and info I have it figured out and now have a great report(s) showing income (interest and principal paid) by security and a performance report showing amount investied and present value.

Let's put this one to rest. Thanks a bunch for your help

QWinUser

@Phil H. - Glad you figured it out and now have what you want.