Stephanie SchaderProgram Development Manager

NCSHA Annual ConferenceJanuary 15, 2015

Ginnie Mae Policy Overview

Ginnie Mae Overview

• Ginnie Mae’s mission is to attract capital from the global capital markets into the U.S. housing industry.

• We do this via the administration of a mortgage-backed securities (MBS) program dedicated to mortgage loans that are insured by government agencies (FHA, VA, USDA RD, HUD PIH).

• Through the MBS program, loans are pooled and converted to securities that are guaranteed, via Ginnie Mae, by the U.S. Government.

• There are currently over $1.5 trillion of securities outstanding.

• Ginnie Mae is a government-owned corporation, located within HUD.

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Program Development Group

• New unit within Ginnie Mae dedicated to updating and maintaining program policies contained in the MBS Guide and announced through All Participants Memoranda (APMs)

– Guidance revisions made with stakeholder input – Aim to make guidance clear and intuitive for program users

• Work extensively with other areas of Ginnie Mae:– Office of Securities Operations — Systems modernization projects and policy implementation– Office of Capital Markets — Disclosures and investor outreach– Office of the President – Coordinate policy implementation and announcements with broader

Administration policy goals

• Work closely with the Insuring Agencies (FHA, VA, USDA RD, and HUD PIH) as well as CFPB and FHFA

– Often broader market regulation changes must be reconciled with our program– Aim to inform and make transition as seamless as possible for Issuers

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Recently Published Policy

• Revised SCRA reimbursement requirements to allow the DoD Database (DMDC) Status Reports to be used in lieu of Military Orders, greatly streamlining the process for Issuers and borrowers (APM 14-13)

• Implemented changes to pooling eligibility requirements to accommodate the 45-day ARM look-back period required by CFPB regulation (APM 14-12)

• Clarification of the Buyout requirements for Delinquent loans that is more closely aligned with industry norms, is consistent with the securities prospectus, and facilitates the loan modification process

– Loans due but unpaid for three (3) consecutive months are eligible (MBS Guide 18-3(B)(1))

– Partial payments received from borrowers do not reset the clock

– Based on the application of payments received

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Recently Published Policy Cont’d

Buyout Policy Examples

No Payment Received

January February March April

Payment Due $1,000 $1,000 $1,000

Eligible for buyoutAmount Paid $0 $0 $0

Last Paid Installment December December December

Payment Received in the Amount Due

January February March April May Payment Due $1,000 $1,000 $1,000 $1,000

Eligible for buyoutAmount Paid $0 $0 $1,000* $0

Last Paid Installment December December January January

*A payment in the full amount of the installment advances the last paid installment by one month

Recently Published Policy Cont’d

Revised Net Worth and Liquidity Requirements for Single-Family Issuers

•Single-Family Issuer Minimum Net Worth: – Minimum adjusted net worth requirement of $2,500,000 plus 0.20% (20 basis points) of the

Issuer's total effective outstanding single-family obligations has been increased to $2,500,000 plus 0.35% (35 basis points) of the Issuer's total effective outstanding single-family obligations.

•Single-Family Issuer Minimum Liquidity: – Minimum liquid assets requirement of 20% of required net worth has been changed to the

greater of $1,000,000 or 0.10% (10 basis points) of the Issuer's outstanding single-family securities

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Recently Published Policy Cont’d

Issuers Approved for more than one Program Minimum Net Worth and Liquidity: •Issuers participating in more than one program type (Single-Family, Multifamily, Manufactured Home, and/or HECM MBS) will have to meet a minimum adjusted net worth and liquid assets requirement equal to or greater than the sum of the minimum requirements for all the program types in which the Issuer is approved to participate, as opposed to the highest program requirement.

Issuer Demonstrated Participation Requirement:•Issuers must demonstrate participation by issuing, acquiring, or subservicing Ginnie Mae MBS in the program(s) for which they are approved in the preceding 18 months. An Issuer which fails to demonstrate participation, may request an extension of time in order to comply with the requirement, pending Ginnie Mae approval.

New Requirements Effective Dates:

•Beginning January 1, 2015, applicants seeking Issuer approval are required to meet the new requirements.

•Beginning January 1, 2015, in order for a new Pool Issuance for Immediate Transfer (PIIT), or MSR bulk transfer, arrangement to be approved, the acquiring Issuer has to meet the new requirements.

•Program specific net worth and liquidity (if applicable) requirements currently in place for the Multifamily, Manufactured Home, and HECM MBS programs remain unchanged. Institution-wide capital requirements also remain unchanged.

•Beginning January 1, 2015, Issuers must demonstrate active participation in the program in order to maintain program eligibility.

New Requirements Respond to Transforming Housing Market

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* YTD = July 2014

Currently in Development

• Issuer Operational Performance Profile (IOPP) – will measure an Issuer’s operational and default performance against its peers

– Enables Issuers to better compare their performance to Ginnie Mae’s expectations– Provides Issuers with a framework and methodology to gauge their effectiveness within a

predetermined set of metrics– Bolsters internal consistency in monitoring business activities across the broad community of

Ginnie Mae Issuers and establishes basis for providing constructive feedback to Issuers

• Additional Guidance on Pool Issuance for Immediate Transfer (PIIT) Transactions

– Eligibility requirements– Process for requesting approval

• FHLB Chicago Conduit – Illinois and Wisconsin HFA members able to apply with FHLB Chicago now– Working on enabling other FHLBs’ members to participate– Servicing Retained and Servicing Released loan sales available– Members sell to FHLB Chicago, which then issues Ginnie Mae-guaranteed MBS

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Contact Information

Stephanie Schader

Program Development Manager

Stephanie.a.schader@hud.gov

(202) 475-7876

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