Ginnie to securitize adjustable-rate mortgages in August

Ginnie Mae will allow issuers to include adjustable-rate mortgages in real estate mortgage investment conduit deals closing in August. Ginnie guarantees timely principal and interest payments on mortgage-backed securities backed by loans insured by the Federal Housing Administration and the Department of Veterans Affairs. Ginnie notified approved sponsors of the new ability to include ARMs in a notice sent last week. Freddie Mac notified lenders last week that it would securitize multifamily adjustable-rate mortgages as part of its Capital Markets Execution program. Sponsors seeking to include single-family ARMs as collateral in an August Ginnie transaction must provide a draft of the deal documentation to Ginnie Mae, its financial adviser Ernst & Young and its legal adviser Hunton & Williams. The draft must be sent by June 30 to be eligible. Write to Jon Prior. Follow him on Twitter @JonAPrior.

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