Ginnie Mae reaches milestone in development of HECM MBS MortgagePress.comHome Equity Conversion Mortgage
Ginnie Mae released program requirements and reporting
specifications for its new Federal Housing Administration
(FHA)-insured Home Equity Conversion Mortgage (HECM)
mortgage-backed security (MBS). The HECM Mortgage-Backed Securities
(HMBS) Reference Guide is intended to provide new and existing
issuers with a comprehensive overview of Ginnie Mae's HMBS
program.
"The availability of the guide marks an important stage in the
development of the first program allowing issuers to securitize
HECMs in a vehicle backed by the full faith and credit of the
United States government," said Michael J. Frenz, executive vice
president of Ginnie Mae. "The HECM Mortgage-Backed Securities
Reference Guide will be an essential source of information for
issuers preparing to participate in the HMBS program."
The guide provides issuers with information about the program
rules and requirements for securitizing FHA-insured HECM loans with
Ginnie Mae. Furthermore, the guide provides detailed issuer pooling
and reporting specifications. The guide is an operational guide
intended to inform issuers about Ginnie Mae's requirements,
anticipated process flow for HMBS pool origination and ongoing HMBS
administration and accounting. In addition, this document provides
descriptive information about the files, records and data elements
that are required to be transmitted monthly to Ginnie Mae.
Select program requirements include:
• All Ginnie Mae issuers in good standing will be eligible
to request approval to participate in the HMBS program;
• A Ginnie Mae HMBS pool must have a minimum of three
participants with an outstanding balance totaling a minimum of $1
million; and
• Issuers will have to meet the minimum net worth requirement
of $500,000.
Ginnie Mae worked closely with industry partners during the
development process to outline the business requirements necessary
to support Ginnie Mae's HECM securitization program.
"We applaud Ginnie Mae's efforts to develop a product that will
meet the needs of our growing population of seniors, along with
reverse mortgage originators and investors," said John Robbins,
chairman of the Mortgage Bankers Association. "MBA staff and
members were glad to be able to offer our expertise as we worked
closely with Ginnie Mae to refine and vet the requirements for an
MBS backed by HECMs. The securitization of HECMs is a clear example
of a successful effort to pioneer a much needed new product."
"We will continue to work to make reverse mortgage products more
easily available to those seniors who want them," said Peter Bell,
executive director of the National Reverse Mortgage Lenders
Association. "Ginnie Mae is well positioned to help increase the
liquidity of reverse mortgages, which of course ultimately benefits
consumers."
The HMBS can be sold to investors as a standalone security, or
be used as collateral for a Ginnie Mae Real Estate Mortgage
Investment Conduit. The HMBS will be a new class of the Ginnie Mae
II Custom MBS program and will be structured as an accrual class
pass-through security. Issuers are required to pass through
payments to investors as loan payoffs occur. Like all Ginnie Mae
securities, the HMBS will carry the Ginnie Mae guaranty that is
backed by the full faith and credit of the United States
government.
Ginnie Mae will publish final program guidelines and a revision
of the Ginnie Mae MBS Guide shortly. The updated Ginnie Mae MBS
Guide will also include an HMBS Accounting Manual.
For more information, visit www.ginniemae.com.
