Ginnie Mae has revised its Home Equity Conversion Mortgage (HECM) Mortgage-Backed Securities (HMBS) requirements to allow securitization of multiple participations related to a particular HECM in any one issuance month. The goal is to reduce liquidity pressures on HMBS issuers and ensure the HECM program remains viable and able to serve America’s seniors.
Ginnie Mae’s HMBS program offers access to the secondary market for HECM loans. The program provides issuers the ability to securitize portions of the HECM over time as issuers fund borrower line of credit draws and program fees. These payments are referred to as “participations” or “tails.” Available on October 1, these changes will allow issuers to securitize multiple participations as soon as they are ready.
“Ginnie Mae’s HMBS program changes will enable issuers continuous access to capital market sources of funding to securitize HMBS participations throughout the month,” says Alanna McCargo, Ginnie Mae president. “Our goal is to improve issuer liquidity and strengthen this important program for America’s seniors.”
For more information about the new requirements, including multiple participation requirements and special requirements for participation drawn other than on the first of the month, see APM—23-11.
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