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Ginnie Mae Clarifies its Role During the Lapse in Appropriation
Published Date: 10/7/2013

Washington, D.C. – Ginnie Mae announced the following statement today from President Ted Tozer:

“Ginnie Mae will continue to perform all functions necessary to ensure that there is not a disruption in the market during the lapse in appropriations. These functions include granting of commitment authority, support for continued issuance of Ginnie Mae-guaranteed Mortgage Backed Securities (MBS) (including related PIIT pools) and REMICs, and taking all actions necessary to ensure timely payment of principal and interest to investors."

“In addition, Ginnie Mae has received industry questions about Issuers’ ability to pool certain single family loans during the lapse in appropriations. To be clear, single family loans continue to remain eligible for securitization so long as they meet requirements for insurance/guaranty of the insuring/guaranteeing agency when they are pooled and are in the process of being insured or guaranteed. For example, the United States Department of Agriculture (USDA) requires that lenders obtain conditional commitments from USDA in order to close a Rural Development (RD) single family loan that will be guaranteed by USDA. Where an RD loan has closed consistent with a valid conditional commitment from USDA, the loan may be pooled to back a Ginnie Mae –guaranteed security, notwithstanding that the final issuance of the guarantee may be delayed due to a lapse in appropriation.”

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Ginnie Mae raises capital from investors in the global credit markets to ensure liquidity for affordable rental and homeownership opportunities across the country. Through its MBS, Ginnie Mae finances housing mortgage insurance programs run by the Federal Housing Administration (FHA), the Department of Veterans Affairs (VA), the Office of Public and Indian Housing (PIH) and the Department of Agriculture’s Rural Development Housing and Community Facilities Program (RD).