Ginnie Mae Restricts Three Lenders from Main Securities Program

Ginnie Mae, or the Government National Mortgage Association, carefully decides which lenders are eligible to pool VA loans into Ginnie Mae backed securities. In an effort to improve security and transparency for its investors, the wholly owned government corporation has decided to restrict which pools three specific lenders can put their VA single family -guaranteed loans. The following lenders will be restricted from Ginnie Mae II custom pools only:

  • Freedom Mortgage Corporation - July 1, 2018 through January 1, 2019
  • SunWest Mortgage Company, Inc. - July 1, 2018 through January 1, 2019
  • NewDay USA - April 1, 2018 and concludes October 1, 2018

Because these lenders will only be restricted from Ginnie's II custom pools, some experts are predicting that there will only be modest market impacts. The period of restrictions is also relatively short, meaning these institutions may be allowed to include their VA loans in II pools again shortly. They will just need to create an "acceptable plan for achieving and maintaining prepayment speeds consistent with Ginnie Mae’s program requirements."

In a statement released to the press, representatives from Ginnie Mae cited APM 18-02 and Section 3-21 in the organization's MBS Guide. These guidelines deal with standards for prepayment activity of loans or loan packages included in Ginnie's pools. When banks don't meet these standards, representatives from Ginnie discuss the issue with them in an attempt to guide their policies in the right direction. In the meantime, NewDay, SunWest, and Freedom Mortgage Corporation will simply adjust some of their pricing and deliver their loans to the secondary market using different mechanisms.

Ginnie Mae to Modernize

In other news, Ginnie announced recently that it will be making major upgrades to its mortgage-backed securities platform in the next few years. The goal of the project is to decrease costs and risks, increase efficiencies and security features, and improve the user experience and overall system stability. Users will be introduced to a new centralized help desk while issuers will be getting a new portal called MyGinnieMae.

MyGinnieMae is being designed to provide enhanced security and a single entry point for all approved applications. One of the more exciting aspects of the project is the ability to accept digital promissory notes and other digitized loan files. The aim of When completed, it will be a full-service solution for users who want to access all of Ginnie's business applications. The organization said that it intends to work closely with industry partners to capatalize on the investments its making in technology.

Have any questions about this news or any other topics related to working with Ginnie Mae? We can help. Call or contact us today!

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