Ginnie Mae has announced that investors in Ginnie Mae mortgage securities backed by Home Equity Conversion Mortgages (HECMs) can now take advantage of a new Platinum securities execution—the Home Equity Conversion Mortgages Backed Security (HMBS) Platinum securitization channel. The HMBS option eases the administrative costs of holding multiple (and typically smaller) HMBS securities and, in doing so, enhances the liquidity of the overall market for Ginnie Mae HMBS.
The new Platinum HMBS option is the latest evolution in the modernization of Ginnie Mae’s Platinum securities program, which has been adding investor-focused functionality since 2017. Today, investors can create Platinum products using fixed-rate MBS (15- and 30-year mortgages); Weighted Average Coupon (WAC) Adjustable Rate Mortgage (ARM) and Jumbo Only Fixed mortgages.
The market adoption of the modernized process for Platinum products has been strong: prior to modernization, fiscal year 2017 production of Platinum securities with fixed-rate collateral was only $7.88 billion. Following modernization and automation inside the new MyGinnieMae portal, volume grew to more than $20 billion in fiscal year 2018.
“Today’s announcement is another important step on the path to continually modernize operations at Ginnie Mae to benefit MBS investors and Issuers,” said John Daugherty, SVP, Office of Securities Operations. “Making it simpler for investors to manage their portfolio of Ginnie Mae MBS and HMBS, while enhancing the liquidity of their Ginnie Mae investments, supports our mission to foster a strong secondary mortgage market for government mortgage loans, helping borrowers across the U.S, obtain the lowest mortgage rates an efficient market can offer.”