Summit Unveils Ginnie Mae Changes, Policy Deliberations

The second annual Ginnie Mae Summitrnopened today in Washington with a keynote speech from the new Secretary ofrnHousing and Urban Development Julian Castro and proceeded with severalrnimportant announcement from Ginnie Mae President Ted Tozer.rn</p

Castro called on the housingrnindustry including, he said, lenders that “We need to work together to see arnrobust, healthy housing market where those who are ready can buy a home. Ourrnnation is making progress across the board, and HUD is focused on ensuringrnthese opportunities reach every American.” </p

Tozer said that Ginnie Mae’s primaryrngoal now as in the past is to protect and preserve the “utility, relevance andrnremarkably successful track record of the Ginnie Mae MBS program.  The agency’s pioneering role in the creationrnof a securities market for mortgage loans, its continued ability to refine thernprogram as necessary to maintain its unblemished record of profitable operationrnover decades of market change and disruption is a testament to the power of arnwell-conceived and executed government effort to support the healthyrnfunctioning of a sizable and critical private sector function.”   </p

During the summit Ginnie Mae willrnunveil a position paper outlining from Ginnie Mae’s perspective the majorrnissues presented by the transformation in mortgage lending coming out of thernfinancial crisis, Tozer said.  </p

Ginnie Mae also announced thernfollowing: </p<ul class="unIndentedList"<liIt is making final changes to its NetrnWorth and Liquidity Requirements. Detailedrninformation on these changes and when they will take effect will be announcedrnat the Mortgage Bankers Association Annual Convention in October.</li</ul<ul class="unIndentedList"<liEnhancements are being made to GinniernMae's Acknowledgement Agreement. Thernchanges are designed to help balance the needs of the lenders to issuers andrnGinnie Mae's risk management and make the Agreement more widely used. The enhancements will help expand liquidityrnby enabling issuers to further use mortgage servicing rights (MSRs) asrncollateral.</li</ul<ul class="unIndentedList"<liGinnie Mae expends a significantrnamount of resources in the review of applications for new issuers and inrncompliance monitoring of issuers’ activities,-even issuers that have not issuedrnsecurities. In order to most effectively utilize resources, Ginnie Mae hasrndecided to adopt a Dormant Issuer Policy whereby issuers must activelyrnparticipate within an 18-month timeframe. The first evaluation will take placernon January 1, 2015. </li</ul<ul class="unIndentedList"<liThe Federal Home Loan Bank ofrnChicago (FHLBC) and Ginnie Mae have launched a pilot program to give smallrnfinancial institutions more access to the secondary market. The program allowsrnFHLBC to issue securities guaranteed by Ginnie Mae. FHLBC is expected to beginrnissuing securities, backed by mortgages originated by member financialrninstitutions as early as November, 2014. </li</ul

Ginnie Mae said its Summit is anrnopportunity for all of its stakeholders (issuers, document custodians, andrnother federal agencies) to become familiar with the Ginnie Mae business model,rnoperations and plans, and to get a first glance at some of the corporation’s majorrninitiatives, program changes and developmentsrnthat are occurring.  This event also gives stakeholders an opportunity tornprovide feedback and make recommendations directly to Ginnie Mae.

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