Ginnie Mae has launched a scorecard-based risk management tool that will allow issuers to gauge their operational and default performance against both their peers and Ginnie Mae's program standards, according to an announcement from Ginnie Mae.
According to Ginnie Mae President Ted Tozer, the new Issuer Operational Performance Profile (IOPP) tool, with its scorecard approach comparing issuers' performances with those of their peers and with Ginnie Mae's expectations, lays groundwork for issuer-driven performance improvements and enhanced knowledge.
"The launch of the IOPP reflects Ginnie Mae’s ongoing commitment to increasing transparency and value for issuers, investors, and other stakeholders," Tozer said. "We believe this new tool will help us continue to ensure that a safe, effective, and government-backed channel for the flow of capital for U.S. mortgages exists, reducing risk to the taxpayer and providing much-needed capital for the government."
Using the IOPP scorecard, issuers receive immediate and transparent feedback on how they are performing in the Ginnie Mae program in the categories of issuing, pooling, servicing, and month-to-month collateral management. The scorecard allows issuers to check their performance against that of their peers.
The IOPP scorecard uses key metrics such as failure to report UPB, timely reporting of UPB corrections, and a compliance review metric to provide an operational management score. Issuers will receive a delinquency management score based on metrics such as early payment defaults, 60- to 90+-day roll rates, workout effectiveness, and foreclosure inventory (the percentage of loans in foreclosure). These two scores, the operational management score and the delinquency management score, will be reported monthly using the IOPP scorecard. The new tool will help issuers improve their management capability, thus allowing them to better manage their own performance, which will in turn improve Ginnie Mae's overall performance by decreasing operational challenges for the corporation, according to Ginnie Mae.
According to Ginnie Mae's announcement, single-family, multi-family, and Home Equity Conversion Mortgage-Backed Securities (HMBS) have access to the new tool as of February 24. The scorecards were reportedly handed out privately to some issuers at the Mortgage Bankers Association's conference in Dallas earlier this week, and Ginnie Mae is expecting there will be changes to the initiative in the next 12 months as the corporation receives more feedback from industry professionals.
"The IOPP is an Issuer report card, and we believe that once launched, it will help us in our work with our issuers so we can continue to provide stability to the housing finance industry and continue to meet our mission of bringing global capital into the housing finance market to provide affordable housing opportunities to millions of Americans," Tozer said.