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All ​Participant Memorandums (APMs)

APMs (All Participant Memoranda) are issued by IPM generally to announce policy and MBS Guide changes accessed by Issuers, Document Custodians and other participants in Ginnie Mae programs.

5 most recent APMS
2/1/2018 - APM 18-03

The success of Ginnie Mae’s Mortgage-Backed Securities Program is contingent on the integrity of the collateral backing Ginnie Mae securities and on compliance with the requirements of the insuring or guarantying agencies. Ginnie Mae requires Issuers to ensure that each mortgage backing a Ginnie Mae security has a first lien position at the time of pooling and to provide an approved type of title insurance product for each mortgage submitted for pool certification. Over the last two years, Ginnie Mae has increased the number of acceptable title insurance products for modified mortgages to include ALTA Form Mortgage Modification Policies (MMPs). In contrast, Ginnie Mae has never accepted and does not accept Mortgage Priority Guarantees (MPGs), with the limited exception being announced here. Effective immediately, Ginnie Mae will accept MPGs only for modified mortgages backing securities with issuance dates of January 1, 2016 or earlier. MPGs are not acceptable for securities with issuance dates of February 1, 2016, or later.

Under previous document custody and pool certification requirements, Ginnie Mae prescribed Issuers to provide new title policies or title policy endorsements to satisfy the title insurance requirements for modified mortgages. On February 1, 2016, Ginnie Mae published APM 16-01, which revised the Document Custody Manual (DCM), Appendix V-01 of the Mortgage-Backed Securities Guide, HUD Handbook 5500.3 Rev.1. The 2016 DCM revisions allowed Issuers to satisfy title insurance requirements for modified mortgages by delivering an MMP in lieu of a new title policy or title policy endorsement. The 2016 DCM did not include MPGs as acceptable title insurance products.

Ginnie Mae allowed the use of MMPs to address operational challenges faced by Issuers seeking title policy endorsements for certain modified mortgages. MPGs were not included as acceptable title insurance products in the 2016 DCM, in part, because the coverage provided by MPGs was not standard across the industry and could therefore vary across policy providers.

To ensure the lien position of modified mortgages, and prior to the publication of the revised DCM, some Issuers obtained and provided an MPG for modified mortgages submitted for pooling outside of Ginnie Mae standards. The pools containing MPGs are now subject to pool certification issues related to deficient title insurance documentation.

Certain title insurance companies who provided MPGs to Issuers entered into agreements with Ginnie Mae to address the concern surrounding the potential variances in the coverage provided by their MPG products. In response to these agreements and to provide limited relief to Issuers, Ginnie Mae will accept MPGs, but only for modified mortgages backing securities with issuance dates of January 1, 2016 or earlier. The table below illustrates the types of insurance products that are acceptable for modified loans based on the security issuance date corresponding to each loan.

​Security Issuance Date ​Acceptable Title Insurance Products
​January 1, 2016 or earlier ​New Title Policy
Title Policy Endorsement (ensuring priority over defects, liens, and encumbrances)
ALTA Mortgage Modification Policy (MPP)
Mortgage Priority Guarantee Policy (MPG)
​February 1, 2016 or later ​New Title Policy
Title Policy Endorsement (ensuring priority over defects, liens, and encumbrances)
ALTA Mortgage Modification Policy (MPP)
 

All other Issuer responsibilities relating to pool certification and loan documentation remain unchanged, including an Issuer’s responsibility to obtain and record any subordination agreements necessary to ensure that any modified mortgage submitted for securitization has a first priority position.

The updates announced in this APM are reflected in Chapter 24 of the MBS Guide and in Chapter 3 of the Document Custody Manual and are effective immediately. You may retrieve the updated version of these chapters from Ginnie Mae’s website.

If you have any questions regarding this announcement, please contact your Account Executive in the Office of Issuer and Portfolio Management directly, or at (202) 708-1535.

1/25/2018 - APM 18-02

Ginnie Mae continually monitors Issuer participation in the MBS program, and evaluates the MSR portfolios that result from issuance activity to ensure that these portfolios do not have an impact on either the Issuer or securityholders that is adverse to the interests of the program. Effective immediately, Chapters 3, 5, 9, 10, and 18 of the MBS Guide are being expanded to provide additional information about acceptable risk parameters for an Issuer’s Ginnie Mae portfolio and related consequences of non-compliance with these standards.

The revised Chapter 3 provides examples of instances that Ginnie Mae considers outside of the acceptable risk parameters, and are in violation of Ginnie Mae’s program requirements. If an Issuer violates these program requirements, Ginnie Mae may impose greater restrictions on that Issuer’s participation in the MBS Program, including but not limited to requiring that an Issuer’s high-risk portfolio be recalibrated to fall within the acceptable risk parameters; requiring portfolio diversification; or placing a restriction on an Issuer’s participation in the PIIT program and/or multiple Issuer pools.

Issuers should review the updated MBS Guide chapters attached to this memorandum carefully. This guidance should be the basis for ongoing Issuer review of their MSR portfolios and business practices. Issuers should consult with Ginnie Mae as necessary to ensure that their participation meets standards of acceptability.

If you have any questions regarding this announcement, please contact your Account Executive in the Office of Issuer and Portfolio Management directly, or at (202) 708-1535.

1/5/2018 - APM 18-01

Ginnie Mae is revising the definition for the term “Defective Mortgage” and other clauses in Chapter 14 of the MBS Guide to reflect existing Issuer requirements under the Guaranty Agreement to cure or buy out pooled mortgages that are not insured or guaranteed by an agency of the Federal Government. The revisions announced here also seek to provide Issuers with greater clarity about their options for addressing defective mortgages.

Issuers are reminded to prioritize efforts to cure loan defects that arise from missing federal mortgage insurance or guaranty. Mortgages that are missing federal insurance or guaranty by the deadline for final certification of the related pool or loan package are deemed defective. Therefore, Issuers are required to either obtain the requisite insurance or guaranty or to request approval to buy out these mortgages. The revised version of Chapter 14 of the MBS Guide attached to this memorandum, which is effective upon publication, covers these buyout obligations in greater detail.

The percentage of uninsured and unguaranteed loans in Ginnie Mae pools and loan packages is minimal, typically less than one percent (1%) of pooled loans. The percentage of pooled loans that are missing a federal mortgage insurance or guarantee by the final certification deadline is even lower. Therefore, Ginnie Mae does not expect any related Issuer buyout obligations to have a significant impact on the performance of securities or on the financial position of any Ginnie Mae Issuer. However, Ginnie Mae may, at its own discretion, manage the timing and pipeline of mandatory buyouts through its existing buyout approval process so as to minimize the impact of such buyouts on the Issuer or the related security.

If you have any questions regarding this announcement, please contact your Account Executive in the Office of Issuer and Portfolio Management directly or at (202) 708-1535.

12/15/2017 - APM 17-07

Pursuant to the Housing and Economic Recovery Act of 2008 (HERA), the Federal Housing Finance Agency (FHFA) has announced increased conforming loan limits. Accordingly, Ginnie Mae is revising its definition of High Balance Loans as follows. Effective for issuances on or after January 1, 2018, a High Balance Loan is defined as a single-family forward mortgage loan with an original principal balance (minus the amount of any upfront mortgage insurance premium) that exceeds the following limits:

Maximum Loan Amounts (net of any financed MIP or Guaranty Fee)​ ​ ​
Units​ ​Contiguous States, District of Columbia and Puerto Rico ​Alaska, Guam, Hawaii, and the U.S. Virgin Islands
​1 ​$453,100 ​$679,650
​2 ​$580,150 ​$870,225
​3 ​$701,250 ​$1,051,875
​4 ​$871,450 ​$1,307,175
 

 

High Balance Loans are eligible for Ginnie Mae MBS subject to the restrictions detailed in Sections 9-2(B) and 24-2(A)(1) of the Mortgage Backed Securities Guide, HUD Handbook 5500.3, Rev-1 (MBS Guide).

If you have any questions regarding this announcement, please contact your Account Executive in the Office of Issuer and Portfolio Management directly or at (202) 708-1535.

12/7/2017 - APM 17-06

To ensure the strength and liquidity of our MBS Program, Ginnie Mae is continuing to address activities that result in unduly rapid prepayments to investors in Ginnie Mae mortgage-backed securities.

In APM 16-05, Ginnie Mae imposed seasoning requirements for streamlined refinance loans to moderate prepayment trends that appeared inconsistent with market conditions and had a negative impact on the performance of certain Ginnie Mae securities. This APM expands these pooling restrictions, and explains additional measures being taken to protect security performance.

Pooling Restrictions for Streamlined Refinance and Cash-Out Refinance Loans

Effective with pool issuances on or after April 1, 2018, streamlined refinance loans and cash-out refinance loans are eligible for Ginnie Mae I Single Issuer Pools and Ginnie Mae II Multiple Issuer Pools if and only if:

a) the borrower made at least six consecutive monthly payments on the loan being refinanced, referred to hereinafter as the Initial Loan, beginning with the payment made on the first payment due date; and
b) the first payment due date of the refinance loan occurs no earlier than 210 days after the first payment due date of the Initial Loan.

In the interim period before the effective date of this APM, the terms of APM 16-05 remain in effect. Upon the effective date of this APM, the terms of APM 16-05 will be superseded by this APM.

Streamlined refinance or cash-out refinanced loans that do not meet these requirements may not be pooled into Ginnie Mae I Single Issuer Pools or Ginnie Mae II Multiple Issuer Pools, but are eligible for Ginnie Mae II Custom Pools if the loans otherwise comply with Ginnie Mae II Custom pooling parameters.

Rate/Term Refinance Loans

Fully underwritten rate/term refinance loans are acceptable collateral for any eligible Ginnie Mae security and are free from the pooling restrictions identified above so long as:

a) the corresponding housing agency (FHA, VA, RD, or PIH) has implemented a fully underwritten rate/term refinance loan program specifying any attendant seasoning, loan performance, maximum LTV, full documentation, and full appraisal requirements; and
b) the refinance loan in question meets all such housing agency requirements.

Enhanced Monitoring of Prepayment and Re-pooling

Pursuant to APM 16-05, Ginnie Mae is actively monitoring pooling activity to identify Issuer behavior that is inconsistent with previous guidance and the guidance herein. Any Issuer that does not comply with the requirements described in this memorandum will be subject to sanctions in accordance with the Guaranty Agreement and the Mortgage-Backed Securities Guide, HUD Handbook 5500.3, Rev-1 (MBS Guide). Ginnie Mae is able to identify Issuers with unusually fast prepayment rates through operational performance metrics. Issuers with such prepayment rates should anticipate increased engagement from Ginnie Mae. Prepayment information will be included in the next release of the Issuer Operational Performance Profile (IOPP) scorecard.

Upcoming Premium Loan Enforcement

Lastly, in early 2018, Ginnie Mae will be publishing revised standards for the eligibility of, and pooling restrictions applicable to, certain premium rate loans. Further guidance on enforcement of this provision will be forthcoming shortly.

Chapter 9 of the MBS Guide will be updated to reflect the pooling restrictions announced herein.

If you have any questions regarding this announcement, please contact your Account Executive in the Office of Issuer and Portfolio Management directly or at (202) 708-1535.


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Last Modified: 5/20/2018 12:49 PM