Ginnie Mae Changes HMBS Delivery Requirements

NewImage.jpgGinnie Mae announced some changes regarding delivery reguirements for Ginnie Mae Multiclass Securities Transactions involving reverse mortgage MBS or H-REMICs as trust assets.

Previously, issuers were able to include HECM MBS or H-REMICs in Ginnie Mae REMIC transactions as either a separate trust asset group or combined within a trust asset group where other collateral in the transaction or trust asset group was non-HECM backed (ie. Forward) collateral.  It was thought this enhancement would improve the marketability of the Ginnie Mae Multiclass Securities Program and increase the investor base for its securities.

Effective for transactions closing May 2010, and thereafter, Ginnie Mae said it’s is prohibiting the inclusion of Forward collateral in H-REMIC transactions.

Issuance of Ginnie Mae HMBS has skyrocketed over the last two years.  Reverse mortgage issuance during grow over 500% from 2008, coming in at $8.538 billion during 2009.

Chart: Ginnie Mae 12 months

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