The Federal Housing Administration (FHA) has announced important changes to its Home Equity Conversion Mortgage (HECM) program. Under policies announced in Mortgagee Letters 14-07 and 14-21, mortgagees are required to determine whether the mortgagor(s) has a Non-Borrowing Spouse, and to complete a financial assessment of the mortgagor(s), which may result in having to establish a mandatory set-aside for property charges, such as taxes and insurance, at closing. In accordance with its commitment to comprehensive disclosures on HECM mortgage-backed securities (HMBS), Ginnie Mae will require HMBS Issuers to report new information related to these policies at pool issuance and in monthly pool- and loan-level reporting.
Pool Issuance
Effective with April 1, 2015 issuances and thereafter, HMBS Issuers will be required to report new data elements regarding Eligible Non-Borrowing Spouses and property charge set-asides at the time of pooling. To capture the Eligible Non-Borrowing Spouse information, a field has been added to the M01 mortgage record layout and record layouts M15 - M17 were added to Appendix III-28, HMBS Pooling - Import File Layouts, of the Mortgage-Backed Securities Guide 5500.3, REV-1 (MBS Guide).
To capture the property charges set-aside information, a new field has been added and the existing Property Charges Set-Aside Amount field has been redefined. The new field, which has been added to the M11 record layout, indicates whether or not a borrower’s property charges set-aside is mandatory. The definition of the Property Charges Set-Aside Amount field in the M12 record layout has been expanded to include funds set aside for property charges, whether required by the results of the borrower’s financial assessment (referred to as a “Life Expectancy Set-Aside” by FHA), or set aside by the borrower voluntarily.
The revised relevant mortgage record layouts from Appendix III-28 are excerpted in Attachment A. Beginning February 1, 2015, Issuers will be able to test the new record layouts. If you have any questions regarding testing, please call the GinnieNET Helpdesk at 1-800-234-4662, Option 1.
Monthly Pool- and Loan-Level Reporting
Effective with the April 2015 activity reported in May 2015, and thereafter, HMBS Issuers will be required to report additional data elements that reflect the new at-issuance elements, including a Remaining Property Charges Set-Aside Amount field. The new data elements in the revised mortgage record layouts from Appendix VI-17, HMBS Issuer Pooling and Reporting Specification for MBSAA, are excerpted in Attachment B. If you have any questions regarding monthly reporting, please call the Ginnie Mae Reporting Hotline at 888-446-6434, Option 2.
Please note that additional HMBS mortgage record layout revisions will be introduced in a forthcoming APM that will include a revised Appendix III-28 and revised Appendix VI-17 in their entirety. Also, some of the record layouts attached contain data field revisions that are not introduced in this APM - they will be introduced in the forthcoming APM.
Applicable changes to Chapter 35 pertaining to Eligible Non-Borrowing Spouses will be officially incorporated into the MBS Guide on February 1, 2015; applicable changes to Appendix III-28 will be officially incorporated into the MBS Guide on April 1, 2015; and applicable changes to Appendix VI-17 will be officially incorporated into the MBS Guide on May 1, 2015.
If you have any non-technical questions regarding this announcement, please contact your Ginnie Mae Account Executive in the Office of Issuer and Portfolio Management directly or at 202-708-1535.
Attachments:
Attachment A: Revised mortgage record layouts in Appendix III-28
Attachment B: Revised mortgage record layouts in Appendix VI-17