Mortgage

Ginnie Mae hits loanDepot with VA mortgage restrictions

Ginnie's crackdown on loan churning continues

Beginning February 1, loanDepot will be restricted from including its Department of Veterans Affairs single-family loans in the Ginnie Mae guarantee pools.

Ginnie Mae is also announcing that it has removed the previously announced restriction limiting Freedom Mortgage Corporation, which will begin on March 1.

Ginnie Mae offers federally insured mortgage bonds for FHA and VA mortgage lenders. Recently, Ginnie Mae cracked down on what it believes is unnecessary loan churning in its VA pools. Said actions are understood to be the result of those efforts.

Like Freedom, loanDepot will see the removal of such restrictions “based on the Issuer having demonstrated to Ginnie Mae’s satisfaction that (a) its prepayment speeds are substantially in-line with those of equivalent multi-Issuer cohorts, and (b) such improved performance is sustainable,” the federal institution said in a statement.

loanDepot remains an approved Ginnie Mae issuer and is authorized to pool FHA and RHS single-family insured mortgages in all eligible Ginnie Mae pool types.

In a statement, loanDepot said that it "respectfully disagree[s]" with Ginnie's decision but will continue to do what they can to assist veterans with their financing needs. 

"We remain firm in our resolve to continue to serve the veteran community, as we have since our inception," the release states. "In 2018 alone we helped 5,358 veterans become homeowners, an achievement for which we take great pride. Additionally, we are continuously evaluating how we can improve our performance and enhance our service, and our Voice of the Customer survey results and customer service scores speak to the level of care, concern and quality that we apply to each and every transaction."

From the statement:

These program restrictions are part of Ginnie Mae’s ongoing efforts to enforce Section 3-21 of Ginnie Mae’s MBS Guide, which establishes as a required program risk parameter that an issuer’s “origination and servicing practices…ensure that the performance of an Issuer’s securities is in line with that of similarly constituted securities for the Ginnie Mae portfolio as a whole.”

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