APMs (All Participant Memoranda) are issued by IPM generally to announce policy
and MBS Guide changes accessed by Issuers, Document Custodians and other
participants in Ginnie Mae programs.
Periodically, Ginnie Mae implements minor updates to the MBS Guide, 5500.3, Rev-1 to ensure that its policies are clearly and accurately reflected and to notify Issuers about upcoming operational changes. Please note the following announcements.
Aligning the MBS Guide with the changes announced in APM 18-06
In APM 18-06 Ginnie Mae updated the Fidelity Bond and Errors and Omissions (E&O) insurance policy requirements in Chapter 2 of the MBS Guide. More specifically, APM 18-06 updated Chapter 2, Part 7, Section B, eliminated the Loss Payable Endorsement clause, revised Ginnie Mae’s coverage and deductible requirements, and introduced a requirement that Issuers forward to Ginnie Mae a copy of their full Fidelity Bond and E&O insurance policy via the Independent Public Accountant (IPA) module within MyGinnieMae (MGM).
This APM removed Chapter 2, Part 7, Section B(3) of the MBS Guide because the language in it was made obsolete by APM 18-06. The former subsections B(4), B(5), and B(6) have become subsections B(3), B(4), and B(5) after this change.
Ginnie Mae also modified Chapter 3, Part 6, Section A(1), Part 13, Sections B(1) and C(1), and Part 14, as well as Chapter 7, Part 4, Section A(7) of the MBS Guide to reflect the changes announced in APM 18-06.
Appendix V-2 (Attestations of RPB for Loans Past Due for Final Certification) of the MBS Guide stated that Issuers with pools or loan packages that are past due for final certification and exceed the applicable threshold described in Chapter 11, Part 9, Section A must identify the pools and loans that are preventing final certification to determine the amount of the letter of credit that will be required from the Issuer. In Appendix V-2, the Original Principal Balance was used to determine the amount of the Letter of Credit that will be required from the Issuer; however best practices in the marketplace call for the Remaining Principal Balance to be used. Effective immediately, Ginnie Mae hereby changes “Original Principal Balance” to “Remaining Principal Balance” everywhere it appears Appendix V-2.
Ginnie Mae removed the reference to OMB from Appendix VI-8 (Excess Funds Agreement) because that form does not require a clearance from OMB.
Ginnie Mae modified Appendix III-27 (GNMA II Guaranty Agreement HMBS), Section 1.05(aa) in order to align it with the changes announced in APM 19-07. It now reads:
“Reporting Cutoff Date: With respect to a payment date for the Securities, HMBS Issuers must establish the last business day of the month as the monthly reporting cut-off date to ensure consistency across all HMBS program participants and with the provisions of the HMBS Investor Reporting Manual.”
Appendix III-29 correctly stated on the first page that Ginnie Mae requires a minimum of three Organization Administrators for each Issuer, as announced via APM 20-11. Page 2 of Appendix III-29 incorrectly stated that the minimum amount of Organization Administrators is two while three or more are recommended. A correction was made on page 2 of Appendix III-29 accordingly to consistently reflect that Ginnie Mae requires a minimum of three Organization Administrators, and encourages Issuers to have more than the minimum as a safeguard against operational challenges.
Chapter 11, Part 9, Sections A and B and Appendix V-3 (Attestations of RPB for Loans Past Due for Recertification) of the MBS Guide contained erroneous references to Chapter 11, Part 6, Section B. These have been replaced with the correct ones, which point to Chapter 11, Part 9, Sections A and B, respectively.
Appendix V-3 contained an erroneous reference to the Original Principal Balance in the table on page 2 of the document, which was changed to refer to the Remaining Principal Balance.
The language used in Chapter 2, Part 6(2)(c) of the MBS Guide to list the staff requirements for all applicants was changed from “government loan servicing, payment processing” to “government loan servicing, including payment processing.”
Chapter 2, Part 6(3)(a)(ii) was modified from “g. Claims processing (FHA/VA)” to “g. Claims processing (FHA/VA/RD/PIH).”
Chapter 2, Part 6(3)(b) was also updated in several areas to clarify that the section is referring to Multifamily originations.
Ginnie Mae remediated a gap in the MBS Guide by updating Chapter 3, Part 2 and Part 7, Section A(5) to explicitly state that in addition to FHA approval, issuers must also maintain VA, RD, and PIH approval (as applicable). While all issuers are required to be FHA approved, Issuers with VA, RD, and PIH loans in their portfolios are also required to be VA, RD, and PIH approved, respectively.
The table in Chapter 11, Part 9, Section A(1)(c) contained a typing error referring to 50% instead of 5%. The error was fixed.
The second paragraph in Chapter 14, Part 2 of the MBS Guide was updated because it was truncated. It now reads:
“No Issuer or subcontract servicer may, without the written permission of Ginnie Mae, remove a loan, whether pursuant to a substitution or otherwise, from a pool or loan package or reduce a balance on a pooled loan for any reason not specifically authorized in the applicable Guaranty Agreement or in this Guide.”
Chapter 10, Part 2, Section B, Chapter 24, Part 2, Section A(4) and Part 3, Section A, Chapter 25, Part 3, Section A, Chapter 26, Part 3, Section A, Chapter 27, Part 3, Section A, Chapter 28, Part 3, Section A, Chapter 29, Part 3, Section A, and Chapter 30, Part 4, Section A of the MBS Guide contained an erroneous reference to Chapter 13, Part 4. It was replaced with the correct one, which is to Chapter 13, Part 7.
The incorrect numbering of the subsections in Chapter 35, Part 6, Section J of the MBS Guide was corrected.
Updated Summary of Addresses
Ginnie Mae has also updated its Summary of Addresses to ensure participants have the most up to date contact information for Ginnie Mae and its agents.
Due to the continuing impact of the COVID-19 Pandemic National Emergency, Ginnie Mae will continue the temporary measure allowing for the electronic execution and transmission of form HUD 11711A (Release of Security Interest) and form HUD 11711B (Certification and Agreement) in order to minimize potential market disruptions, as originally announced in the APM 20-01.
Issuers are reminded that the electronic signature utilized on the 11711A/B must, in all cases, be performed, affixed or reflected as to allow a person reading the form to identify the name, title, and business name of the signor. The electronic signature may not be an audio recording, a video recording, or comprised exclusively of biometric data.
Any forms HUD 11711A and HUD 11711B signed electronically may also be transmitted electronically between interim lenders, Issuers, and Document Custodians provided that they are maintained in PDF format and that the Document Custodian is able to reproduce a printout of those PDF files to be included in the relevant physical pool file or upon Ginnie Mae's request. Issuers must ensure that the Document Custodian is able to receive and reproduce the electronic forms before transmitting them for the Initial Certification review.
As it has been one year since the guidance in APM 20-01 was originally issued, Document Custodians are notified that they may use the electronically signed 11711 forms to complete Final Certification, when the forms meet the standards directed above.
Continuation of this temporary measure does not constitute a revocation of the Document Custody Manual Appendix III-05 of Ginnie Mae's MBS Guide 5500.3 Rev. 1 stipulating that the original form HUD 11711A must include the wet signature and title of individual signing on behalf of interim lender to meet Initial Certification requirements, and that the form HUD 11711B must include the wet signature of an officer of the Issuer authorized under the form HUD 11702 (Appendix I-2). Ginnie Mae continues to reserve the right to require wet signatures for the affected loans, and will provide additional guidance on this topic when the crisis related to COVID-19 has been mitigated or it otherwise deems appropriate.
If you have further questions, please contact your Account Executive in the Office of Issuer and Portfolio Management directly.
Due to the continuing impact of the COVID-19 Pandemic National Emergency on forbearance levels and delinquency rates, Ginnie Mae is further extending the exemptions that were announced in the APM 20-06: “Treatment of Mortgage Delinquency Ratios for Issuers Affected by COVID-19" and extended in the APM 20-17: “Extension of Temporary Relief from the Acceptable Delinquency Threshold Requirement” from July 31, 2021 through January 31, 2022 (December 2021 investor reporting).
Ginnie Mae will continue to exclude any delinquencies occurring on or after April 2020 for the purposes of enforcing the provisions in Ch. 18, Part 3, §§ C & D. Ginnie Mae will provide this exclusion automatically through January 31, 2022 to Issuers that were compliant with Ginnie Mae’s delinquency rate thresholds as demonstrated by their April 2020 investor accounting report, reflecting March 2020 servicing data. Issuers do not need to change any aspect of their monthly report to benefit from this exclusion and must continue to report loans in forbearance as delinquent in accordance with established procedures.
Pursuant to the Housing and Economic Recovery Act of 2008 (HERA), the Federal Housing Finance Agency (FHFA) has announced increased conforming loan limits. Accordingly, Ginnie Mae is revising its definition of High Balance Loans as follows. Effective for issuances on or after January 1, 2021, a High Balance Loan is defined as a single-family forward mortgage loan with an original principal balance (minus the amount of any upfront mortgage insurance premium) that exceeds the following limits:
Additional information on conforming loan limits for the Commonwealth of the Northern Mariana Islands may be obtained directly from FHFA. High Balance Loans are eligible for Ginnie Mae MBS subject to the restrictions detailed in Ch. 9, Part 2, § B and Ch. 24 Part 2, § A(1) of the Mortgage Backed Securities Guide, HUD Handbook 5500.3, Rev-1 (MBS Guide).
If you have any questions regarding this announcement, please contact your Account Executive in the Office of Issuer and Portfolio Management directly or at (202) 708-1535.
Ginnie Mae published APM 20-12, Ineligibility of LIBOR Products for Single-Class MBS, on September 21, 2020. APM 20-12 prohibited the securitization of new LIBOR-Based adjustable rate HECMs effective with HMBS issued on January 1, 2021 or later. After further consideration of the impact of the COVID-19 Pandemic on a lender’s ability to close HECM transactions that were initiated prior to the publication of APM 20-12, Ginnie Mae is hereby extending the deadline for securitization of new LIBOR Based HECMs as follows.
Ginnie Mae will restrict the eligibility of new adjustable rate HECMs for securitization into any HMBS pool type that relies on LIBOR, including pool types “C AL” and “C ML,” effective with HMBS issued on or after March 1, 2021. This means that the first participation of any LIBOR-Based HECM must be securitized into HMBS with an Issue Date of February 1, 2021 or earlier to remain eligible for securitization under Ginnie Mae’s program. Subsequent Participations—that is participations other than the first participation—that are associated with a HECM loan that is backing HMBS with an Issue Date of February 1, 2021 or earlier will continue to be eligible for securitization without restriction until further notice.
Chapter 35 of the MBS Guide, 5500.3, Rev-1 has been amended in accordance with this memorandum. If you have any additional questions please contact your Account Executive in the Office of Issuer and Portfolio Management.