By Weiner Brodsky Kider, PC
In NRMLA’s September 24 Weekly Report to Members, NRMLA notified Members that it had submitted comments to Ginnie Mae responding to the agency’s recent actions (through Ginnie Mae All Participants Memorandum 2020-12 (APM 20-12) prohibiting the inclusion of LIBOR-based loan pools in HMBS beginning January 1, 2021.
In that connection, we remind Members that, in accordance with longstanding Ginnie Mae requirements (see APM 19-07), originators and Ginnie Mae Issuers effectively need to close and fund all LIBOR-based HECM loans prior to December 1, 2020 if they are to be eligible to be included in Ginnie Mae HMBS pools. That means that no LIBOR-based HECM Loan—without regard to its date of application, or the date on which the corresponding FHA case number was assigned, or the date it was “originated”—will be eligible for pooling in Ginnie Mae HMBS unless it is closed and funded prior to December 1, 2020.
While NRMLA is continuing to confer with Ginnie Mae about, among other things, potential options that might be made available to permit the pooling of certain loans or classes of loans for a limited additional period of time beyond the cut-off date specified in APM 20-12, there can be no assurances that such options will be made available. Accordingly, NMRLA Member originators and Ginnie Mae Issuers (in consultation with their respective counsel and advisors) will want to consider and put into place timely and appropriate steps and communications (including with their prospective borrowers and lending and other business partners) with respect to all LIBOR-based HECM loans in process intended to be included in Ginnie Mae HMBS pools that will or may “miss” the APM 20-12 December 1, 2020 closing/funding cut-off date.
NRMLA will address these matters, among many others, during its 2020 Virtual Annual Meeting on November 10-12, to which all Members again are invited to register and attend. NRMLA also will apprise Members in the interim if there any substantive developments relating to APM 20-12.