Ginnie Mae has announced policy changes to strengthen the mortgage sector by increasing issuer liquidity. Ginnie Mae will be shortening the re-pooling seasoning requirement for reperforming loans from six months to three months and allowing issuers the option to pool re-performing loans into TBA eligible Ginnie Mae II Multi-Issuer Pools. Ginnie Mae will effectuate these policy changes no later than the end of the first quarter of 2023 with a formal policy notice forthcoming.
“During the past several months, we have engaged with a variety of stakeholders regarding our RG Pool program,” said Ginnie Mae President Alanna McCargo at the MBA’s Annual Conference in Nashville. “We have received many questions about the future of the RG program and feedback on the complexities associated with these pools, especially in this rising rate environment. The early buyout activity during the pandemic has largely subsided given the higher interest rate environment and the transition in delinquencies. So, I urged my team to think hard about how we can give the market clarity on the future of this pandemic-era program. I’m pleased to announce that by the end of the first quarter of 2023, Ginnie Mae will be changing our policy and requirements for these reperforming loan pools, making RG pooling optional.”
This change by Ginnie Mae reverses several of the temporary pooling restrictions placed on reperforming loans introduced during the pandemic (APM 20-07, dated June 29, 2020).
“One of the most important aspects of my job is to ensure we manage risks to the government mortgage programs and that we maintain a stable and equitable housing finance market,” said McCargo. “The Biden Administration and Secretary Fudge asked me to take on this incredible responsibility to serve America’s housing market and protect taxpayers. I do not take this lightly. I lead our terrific team of public servants at Ginnie Mae and take great care in the decisions we make for the future. I also pride myself and our team on transparency, actively listening, and proactive engagement with the use of evidence and data to guide us. In my two plus decades in housing finance, we’ve experienced historic highs and lows and I have seen this industry weather the most volatile market conditions. Looking back to the start of the COVID-19 pandemic in March 2020, we didn’t know how the markets or households would be impacted, but we worked together to expand liquidity with laser focus on keeping people in their homes and avoiding foreclosures.”
President McCargo reemphasized the one-year extension of the implementation period for its Risk Based Capital (RBC) requirement published in its updated minimum financial requirements for IMBs in APM 22-11. The RBC requirement itself has not changed. Rather, the extended implementation period provides additional time for the mortgage industry to adapt to the new framework.
“We are working through this cycle together,” said President McCargo. “I am committed to engaging with stakeholders to ensure a strong IMB industry that is able to continue supporting the many households facing significant affordable housing challenges.”