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Ginnie Mae Launches Digital Collateral Initiative for its MBS Program
Contact: Douglas Robinson
(202) 475-7818
Published Date: 7/16/2020 9:00 AM

WASHINGTON, D.C. – Today, Ginnie Mae announced via All Participants Memorandum 20-10 (APM 20-10) that it has begun to implement the policy, technology, and operational capabilities necessary to accept electronic promissory notes and other digitized loan files as collateral for Ginnie Mae securities (Digital Collateral). As part of this initial phase, Issuers may apply to participate as eIssuers and begin securitizing government-backed mortgages comprised of Digital Collateral with Ginnie Mae approval.

Interested Issuers and Document Custodians may submit their applications individually or jointly. All applications to participate in this phase of the Digital Collateral Program must be submitted to Ginnie Mae via email at no later than August 15, 2020.

“This announcement is a major step for Ginnie Mae following two years of collaboration with industry stakeholders to develop the right set of policies that will lead to successful implementation of Digital Collateral in the government-backed industry segment,” said Ginnie Mae Principal Executive Vice President Seth Appleton. “Moreover, this is an important milestone that was recommended in the HUD  "Housing Finance Reform Plan

Ginnie Mae will begin reviewing applications on a rolling basis beginning on July 20, 2020. If approved, eIssuers and their eCustodian will need to complete a series of test eNote transactions with Ginnie Mae. Upon successful completion of the test transactions, Ginnie Mae will grant written eMortgage Issuance Authority, which will govern and limit the number of eMortgages (regardless of the principal balance associated with each loan) that may be securitized by that eIssuer during the initial phase of the Digital Collateral Program. There will be no costs associated with the provision of eMortgage Issuance Authority.

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 MBS programs directly support housing finance programs administered by the Federal Housing Administration, the Department of Veterans Affairs, the Department of Housing and Urban Development’s 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 for 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.