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Ginnie Mae has announced the launch of a risk management tool that will allow Issuers to measure their performance not only against program standards, but against their peers. The Issuer Operational Performance Profile (IOPP) tool uses a scorecard approach that allows issuers to gauge their operational and default performance against their peers and Ginnie Mae program expectations. Ginnie Mae President Ted Tozer noted that this initiative lays the groundwork for enhanced knowledge and Issuer-driven performance improvements.
“The launch of the IOPP reflects Ginnie Mae’s ongoing commitment to increasing transparency and value for Issuers, investors, and other stakeholders,” said Tozer. “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.”
The IOPP scorecard gives Issuers immediate and transparent feedback on their performance in the Ginnie Mae program in the areas of issuing, pooling, servicing and collateral management on a month-to-month basis, and calibrates to their peers. Issuers will receive an operational management score based on key metrics such as failure to report unpaid principal balance, timely reporting of UPB corrections, and a compliance review metric based on findings from Ginnie Mae’s most recently-completed compliance review of the Issuers.
The metrics behind the delinquency management score will be based on early payment defaults, 60- to 90+ day roll rates, workout effectiveness, and percentage of loans in foreclosure. The end result will be two scores for each Issuer—one for operational management and one for delinquency management—both of which will be calculated and reported each month. Both Single-Family, Multifamily and Home Equity Conversion Mortgage-Backed Securities (HMBS) Issuers will have access to the tool.
“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.