The APM introduces a new version of the existing Pass-Through Assistance Program (PTAP) for use by issuers facing a temporary liquidity shortfall directly attributable to COVID-19. The existing PTAP program had been tailored to natural disaster situations with more limited impact. The application of PTAP to the COVID-19 National Emergency (PTAP/C19) allows Issuers to apply for assistance in meeting their contractual obligation to make timely and in full principal and interest payments due mortgage-backed security (MBS) holders without being held in default under the Ginnie Mae Guaranty Agreement. This assistance is intended to minimize disruptions in the mortgage servicing and MBS capital markets as borrower forbearance and loss mitigation programs are implemented to provide relief to homeowners affected by the Coronavirus.
Funds advanced by Ginnie Mae will bear a fixed rate of interest. The rate that will apply to a given month’s pass-through assistance to all Issuers will be posted on Ginnie Mae’s Web site on the second business day of each month.
“This is an extraordinary and last resort option for Issuers in these unprecedented times, that will enable them to continue to serve homeowners and renters in America who rely on the government mortgage programs financed by Ginnie Mae,” said Ginnie Mae Principal Executive Vice President Seth Appleton. “As important, this program underscores Ginnie Mae’s commitment to ensure timely payment of scheduled principal and interest to investors holding our MBS in all market conditions.”