Ginnie Mae has announced that it will allow issuers to pool Federal Housing Administration (FHA) short-refinance loans in Ginnie Mae single-family fixed-rate or adjustable-rate mortgage pools.
The loans must meet the criteria for certain FHA Automated Data Processing codes, which Ginnie Mae outlines in its Nov. 8 memorandum.
The short-refi program, which the FHA rolled out in September, is aimed at borrowers who are underwater but current on their mortgages. To Vicki Bott, the FHA's director of single-family programs, the short refi's ability to be sold into a typical Ginnie Mae pool represents one of the program's improvements over the agency's previous efforts to help borrowers regain equity in their homes, such as Hope for Homeowners.
‘We do believe a short-refi is more simplistic and from a secondary market standpoint,’ Bott told Servicing Management. ‘They're TBA-eligible, and so the pricing to the consumer should be lower.’
SOURCE: Ginnie Mae