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Financial Services Law Insights and Observations


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  • Ginnie Mae released the Social Impact and Sustainability Framework and supports broader access to mortgage financing

    Federal Issues

    On September 14, Ginnie Mae announced the launch of its “Social Bond” label to indicate underlying collateral that is designed to support a positive social and affordable housing outcome, and released the Social Impact and Sustainability Framework.

    The “Social Bonds” revision to Ginnie Mae’s standard forms of prospectus details attributes of Ginnie Mae MBS to provide transparency to investors. The insurance or guaranties extended under certain government programs reduce borrower credit risk, which promotes broader access to mortgage credit and/or less costly credit for borrowers, thereby expanding homeownership access and affordability among targeted populations (low-to-moderate income borrowers, veterans, senior citizens, rural communities, and/or tribal, Alaska Native, and Native Hawaiian communities).

    The Social Impact and Sustainability Framework highlighted Ginnie Mae’s role in connecting the global capital markets to America’s housing financial system and providing liquidity to support access to affordable housing and lending for first first-time homebuyers, low-to-moderate income households, veterans, seniors, and members of urban, rural, and tribal communities from inception.

    Federal Issues Ginnie Mae GSEs Consumer Finance Mortgages

  • FHFA, Ginnie Mae update minimum financial eligibility requirements for enterprise seller/servicers and issuers

    Agency Rule-Making & Guidance

    On August 17, FHFA and Ginnie Mae released a joint announcement regarding updated minimum financial eligibility requirements for seller/servicers and issuers. Ginnie Mae also updated its requirements for servicers of Ginnie Mae mortgages in coordination with FHFA. According to the standards, sellers and servicers will be required to maintain a base net worth of $2.5 million plus 35 basis points of the unpaid principal balance for Ginnie Mae servicing and 25 basis points of the unpaid principal balance for all other 1-to-4-family loans serviced. Fannie and Freddie sellers and servicers would be required to maintain a capital ratio of tangible net worth to total assets that is greater than or equal to 6 percent. Depository institutions would continue to rely on their prudential regulatory standards to meet the GSEs’ capital and liquidity requirements. According to HUD Secretary Marcia L. Fudge, the standards “ensure that we continue to address the needs of underserved communities through easy, equitable and sustained access to mortgage credit.” FHFA also released FAQs regarding the seller/servicer minimum financial eligibility requirements, and Ginnie Mae released eligibility requirement comparison tables.

    Agency Rule-Making & Guidance Federal Issues FHFA Ginnie Mae Fannie Mae Freddie Mac Mortgages Mortgage Servicing

  • FHA issues RFI on Title I Manufactured Housing Programs

    Federal Issues

    On August 11, FHA and Ginnie Mae issued FHA INFO 2022-76, which seeks public feedback on their Title I Manufactured Housing Programs. According to the request for input, FHA and Ginnie Mae are seeking input on, among other things: (i) opportunities to improve the use and effectiveness of the Title I manufactured housing program; (ii) Title I lender eligibility requirements; and (iii) how to make the programs more competitive in the primary and secondary markets. Responses are due by September 26.

    Federal Issues FHA Ginnie Mae Manufactured Housing

  • Ginnie announces Digital Collateral Program and eGuide enhancements

    Federal Issues

    On May 23, Ginnie Mae announced enhancements to its Digital Collateral Program and released updated guidance for the securitization of eNotes. According to the announcement, the revised Digital Collateral Guide (eGuide) applies to all existing eIssuers and provides eligibility and technological requirements for interested applicants. The announcement noted that Ginnie Mae’s digital program has received continued interest since Ginnie Mae securitized its first eNote in January 2021. The current participants in the Ginnie Mae program are existing issuers, which is a requirement under the program. After a successful pilot phase of its new Digital Collateral Program, Ginnie Mae said that it will reopen the program to new applicants on June 21. Additionally, enhancements to the program include the ability to perform eModifications to eNotes, streamlined procedures for Release of Secured Party requests, and the acceptance of eNotes using a Power of Attorney. The eGuide updates are effective June 1.

    Federal Issues Ginnie Mae Digital Collateral Mortgages

  • FHFA re-proposes GSE seller/servicer eligibility requirements

    Federal Issues

    On February 24, FHFA re-proposed updated eligibility standards that Fannie Mae and Freddie Mac (collectively, GSEs) mortgage sellers and servicers would have to meet. The updated proposed requirements are designed to provide transparency and consistency of capital and liquidity requirements for sellers and servicers with different business models, and would differentiate between the servicing of Ginnie Mae mortgages and GSE mortgages. FHFA noted that the updated proposed requirements, which reflect coordination with other federal agencies, also incorporate feedback from a January 2020 proposal (covered by InfoBytes here), as well as lessons learned from the Covid-19 pandemic.

    Under the updated proposed requirements, all GSE sellers and servicers (both depositories and non-depositories) would be required to maintain a tangible net worth requirement of $2.5 million, plus 35 basis points of the unpaid principal balance for Ginnie Mae servicing and 25 basis points of the unpaid principal balance for all other 1-to-4 unit residential loans serviced, including GSE loans. Current GSE sellers and servicers, as well as new applicants, will be required to comply with the updated proposed requirements by December 31, 2022, minus the exception that Capital and Liquidity Plan requirements must be submitted to the GSEs by December 31, 2023, and are due annually by the end of each year thereafter. Comments on the proposed changes are due in 60 days. FHFA stated it anticipates finalizing the updated proposed requirements in the second quarter of 2022, with most requirements taking effect six months after finalization.

    Federal Issues FHFA Mortgages Fannie Mae Freddie Mac GSE Ginnie Mae Covid-19 Mortgage Servicing

  • FHFA gives guidance on FHLB investments

    Federal Issues

    On August 16, FHFA issued Advisory Bulletin AB 2021-02, which provides guidance regarding federal home loan banks’ investments in Agency Commercial Mortgage-Backed Securities (CMBS) that are issued and guaranteed by either the U.S. government (Ginnie Mae), or by government-sponsored entities Fannie Mae and Freddie Mac. The Bulletin recommends risk management practices, such as establishing certain limits to address the risks associated with unexpected prepayments of CMBS investments. FHFA also “encourages early adherence” to the guidance, but states that “by December 31, 2021, all Banks should have appropriate Agency CMBS concentration risk limits in place.” Guidance in the Bulletin includes, among other things: (i) pre-purchase analytics; (ii) the minimum risk-adjusted spread requirement; (iii) concentration limits; (iv) reporting; and (v) prepayment projections.

    Federal Issues FHFA GSE Fannie Mae Freddie Mac Ginnie Mae Risk Management Commercial Mortgage Backed Securities

  • Ginnie Mae extends temporary relief from delinquency threshold requirement through July 2021

    Federal Issues

    On December 7, Ginnie Mae issued APM 20-17 extending the temporary exclusions announced in APM 20-06 (previously covered here) for issues in calculating delinquency ratios.  Specifically, Ginnie Mae will continue to exclude any delinquencies occurring on or after April 2020 when calculating the ratio. Ginnie Mae will provide this exclusion automatically through July 31, 2021 to issuers who were compliance with the delinquency rate thresholds as demonstrated by their April 2020 investor accounting report, reflecting March 2020 servicing data. 

    Federal Issues Covid-19 Ginnie Mae Debt Collection

  • LIBOR-based loans will not be eligible for Ginnie Mae pooling

    Federal Issues

    On September 21, Ginnie Mae issued All Participant Memorandum 20-12, which states that Ginnie Mae will stop accepting the delivery of single-family forward adjustable rate mortgage (ARM) loans, dated on or after January 1, 2021, with any interest term based on LIBOR, for securitization in any pool. Additionally, any adjustable rate reverse mortgages (HECMs) will be ineligible for securitization into any HMBS pool that relies on LIBOR if not securitized as of January 1, 2021, “without regard to their date of origination or the date in which the corresponding FHA case number was assigned.” Participations associated with HECM loans backing HMBS will continue to be eligible without restriction, so long as the issuance date is on or before December 1.

    Federal Issues Ginnie Mae Mortgages Securities LIBOR

  • Ginnie Mae issues APM on treatment of mortgage delinquency ratios for issuers

    Federal Issues

    On May 14, Ginnie Mae issued APM 20-06 on the treatment of mortgage delinquency ratios for users affected by Covid-19. Under the Mortgage Backed Securities Guide, an issuer that fails to maintain delinquency rates below certain specified threshold levels may be subject to sanctions. Recognizing that Covid-19 related hardships may cause issuers to experience delinquency rates that exceed the maximum thresholds, effective immediately, Ginnie Mae will exclude any new issuer delinquencies occurring on or after April 2020 when calculating the delinquency ratios. This exclusion will automatically apply to issuers that had delinquency rates below the applicable thresholds as reflected by their April 2020 investor accounting report, reflecting March 2020 servicing data. Issuers that were not compliant with these provisions as of their April 2020 report must contact their Account Executive to determine their eligibility for this exclusion. The exemptions and delinquent loan exclusions automatically expire on December 31, 2020, unless rescinded earlier or extended by Ginnie Mae, or the end of the national emergency, whichever comes earlier.

    Federal Issues Covid-19 Ginnie Mae Mortgages

  • Ginnie Mae announces changes to its Pass-Through Assistance Program in response to Covid-19

    Federal Issues

    On April 10, Ginnie Mae issued APM 20-03, announcing that Ginnie Mae has revised and expanded the Issuer assistance programs in Chapter 34 of the Mortgage Backed Securities Guide (MBS Guide), including the Pass-Through Assistance Program (PTAP). PTAP/C19—the PTAP that is specifically authorized for use in response to the Covid-19 national emergency—is available for Issuers that apply for assistance through an executed request and repayment agreement, and subject to a Master Supervisory Agreement, which will govern the terms of the assistance. The PTAP funds will carry a fixed interest rate for all Issuers requesting assistance in that month, to be posted on Ginnie Mae’s website on the second business day of each month.  Funds may only be used to cover shortfalls in required principal and interest payments, and may not be used for any other fees or operational costs of the servicer.  In addition, Issuers may only request assistance once in any given month. While neither a request for assistance nor the provision of assistance under the program will constitute a basis for default under the Ginnie Mae Guarantee Agreement, any breach of the Master Supervisory Agreement or related Request and Repayment Agreements will constitute an event of default under the Master Supervisory Agreement and related Request and Repayment Agreements, the MBS Guide and the Guaranty Agreement. The APM provides additional information for third-party financers and issuers on topics including use of the PTAP/C19 funds and the deadline for seeking PTAP/C19 assistance.

    Federal Issues Covid-19 Ginnie Mae Mortgage-Backed Securities Mortgages


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