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Ginnie Mae Announces Pooling Restrictions for LIBOR-based Adjustable-rate Mortgages
Contact: Douglas R. Robinson
Douglas.R.Robinson@HUD.gov
(202)475-7818
Published Date: 9/21/2020 8:50 AM

WASHINGTON, DC – Ginnie Mae announced today restrictions on the pooling of adjustable-rate mortgages with rates indexed to the London Interbank Offered Rate (LIBOR). Details of the restrictions, which are effective with security issuances dated on or after January 1, 2021, are published in All Participants Memorandum 20-12 (APM. 20-12).

This guidance follows Ginnie Mae’s adoption of the recommendations of the Alternative Rates Reference Committee (ARRC) relating to fallback language for new issuances of LIBOR floating rate securities.

“These changes underscore Ginnie Mae’s commitment to managing risk and keeping the MBS program current with developments in the capital markets” said Executive Vice President Eric Blankenstein. “Ginnie Mae is fervent in our commitment to working with our program participants and other federal entities to fulfill our mission and ensure that capital continues to flow efficiently through our program to support the American housing system.”

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 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.

Multiclass Securities are structured mortgage-backed securities in which the cash flows from the underlying collateral consisting of Ginnie Mae I and II MBS are allocated to different bond classes having different maturities, coupons, and payment priorities.

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