Washington, D.C. – Today Ginnie Mae published a Request for Input (RFI) as it considers making changes to the parameters governing loan eligibility for pooling of mortgages into its security. This RFI is a part of the agency’s continuing effort to monitor and support the market performance of the Ginnie Mae mortgage-backed securities (MBS). The publication of the RFI follows policy changes already implemented by Ginnie Mae and the Department of Veterans Affairs (VA) to address abnormal prepayment patterns in some mortgages pooled in Ginnie Mae MBS that negatively affect MBS pricing, to the detriment of home mortgage loan affordability.
“Protecting the value of our securities and, thereby, the borrowers Ginnie Mae serves, is paramount and, as such, modifications to our pooling parameters are under consideration,” said Ginnie Mae Acting President Maren Kasper. “This RFI enables the agency to take views from a wide variety of stakeholders under consideration as we work to eradicate abnormal prepayment patterns that are negatively impacting the performance of the Ginnie Mae MBS program.”
The RFI provides background information and analysis for consideration and specifically requests input concerning the potential removal from, or the restriction of, certain cash-out refinance mortgages within the Ginnie Mae II MBS. All responses to the RFI are to be submitted to Ginnie Mae by May 22, 2019. The RFI may be viewed here.
About Ginnie Mae
Ginnie Mae is a wholly-owned government corporation that attracts global capital into the housing finance system to support homeownership for veterans and millions of homeowners throughout the country. Ginnie Mae mortgage-backed securities (MBS) programs directly support housing finance programs administered by the Federal Housing Administration, the Department of Veterans Affairs, the HUD Office of Public and Indian Housing and the Department of Agriculture Rural Housing Service. Ginnie Mae is the only MBS to carry the explicit full faith and credit of the United States government.
Ginnie Mae I MBS are modified pass-through mortgage-backed securities on which registered holders receive separate principal and interest payments on each of their certificates. Ginnie Mae I securities can include single family, multifamily, manufactured home and project construction loans.
Ginnie Mae II MBS are modified pass-through mortgage-backed securities for which registered holders receive an aggregate principal and interest payment from a central paying agent. An Issuer may participate in the Ginnie Mae II MBS either by issuing custom, single-Issuer pools or through participation in the issuance of multiple-Issuer pools, which combine loans with similar characteristics.