Chapter 35 of the Ginnie Mae MBS Guide provides background information for companies interested in becoming issuers of HECM Mortgage-Backed Securities.
The document defines Ginnie Mae requirements, describes anticipated process flow for HMBS pool originations, and lays out ongoing administration and accounting guidelines. In addition, the guide provides information about the files, records and data elements that are required to be transmitted monthly.
Ginnie Mae requires its Issuers to meet the following minimum criteria:
- Issuers must be approved FHA mortgagees in good standing. A mortgagee approved only as an FHA loan correspondent is not eligible to be a Ginnie Mae Issuer.
- Issuers must possess demonstrated experience and management capacity in the underwriting, origination, and servicing of mortgage loans. Issuers may utilize a Ginnie Mae approved sub-servicer; however, the Issuer must have an individual on its staff to oversee the sub-servicer’s performance. This individual must possess at least three years of broad servicing experience.
- Issuers must have fidelity bond and a “mortgagee errors and omissions” policy in effect.
- Issuers must have a quality control plan in place for underwriting, originating, and servicing mortgage loans as well as for secondary marketing.
Net Worth Requirement: For the HMBS programs, Issuers must have a minimum net worth of $5,000,000.
Liquidity Requirement: For the HMBS program, Issuers must also have liquid assets totaling 20% of its Ginnie Mae net worth requirement.
Institution-wide Capital Requirement: Depository institutions must meet the regulatory definition of well-capitalized. Non-depository institutions, including credit unions, must hold equity capital of 6% of the institutions total assets.
Each Issuer applicant is evaluated on an individual basis and approval is granted at Ginnie Mae’s sole discretion. Therefore, approval is not guaranteed by simply meeting our minimum eligibility requirements.