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Ginnie Mae has announced four changes that will impact the business operations for many of its Issuers. The corporation is updating the requirements for notification and prior approval of changes in Issuer business status. The changes are designed to increase efficient business operations for both Issuers and for Ginnie Mae. The revised requirements are effective immediately.
“The housing finance industry is continuing to evolve in response to changes in the economic and regulatory environment, and Ginnie Mae must evolve with the industry,” said Michael Drayne, Ginnie Mae’s senior vice president of Issuer and Portfolio Management. “Our rapid increase in volume, coupled with the growing complexity of the business operations of our Issuers, means that Ginnie Mae must be very responsive as it continues to support the industry.”
The Ginnie Mae MBS Guide updates cover:
►Changes in Relationship with Regulatory Agencies: Written notice must be provided to Ginnie Mae if an Issuer is the subject of a material adverse change in its business relationship with the FDIC, CFPB or a state regulatory agency.
►Mergers: Notification deadlines for the submission of documents have changed pre- and post-merger. Additionally, the number of legal and financial documents required during a merger has been reduced.
►Change in Ownership or Control of an Issuer or Guarantor: The definition of a “change in ownership or control” will now be consistent with the Statement of Financial Accounting Standards No. 57 (FAS-57) issued by the Financial Accounting Standards Board. Additionally, the number of legal and financial documents required during a change in ownership or control has been reduced.
►Transfer of Assets: Issuers planning on executing a transfer of assets must provide Ginnie Mae written notice regarding the transfer at least 30 days prior to the desired effective date.
The revisions are part of Ginnie Mae’s ongoing effort to update the corporation’s requirements and infrastructure for its mortgage-backed-securities program as the result of changes within the housing finance industry and secondary mortgage market. Ginnie Mae has adapted to these changes by updating and strengthening capital and liquidity requirements, changing its counterparty risk management practices, allowing Issuers to pledge mortgage servicing rights (MSRs) as capital.