Ginnie Mae Reminds Issuers About Purchase Obligations

Ginnie Mae published a memorandum on March 24 reiterating the fact that Ginnie Mae Issuers must purchase HECM loans out of HMBS loan pools when the outstanding principal balance reaches or exceeds 98% of the maximum claim amount.  

“When a Mandatory Purchase Event occurs, the Participations related to the HECM must be purchased by the Issuer by the end of the reporting month in which the outstanding principal balance of the related HECM equals or exceeds 98% of the MCA,” the memo says.