GNMA Extends LIBOR Securitization Deadline

GNMA Extends LIBOR Securitization Deadline

Ginnie Mae issuers have been given a brief window to once again include LIBOR-based Home Equity Conversion Mortgages into HMBS pools securitized on or before March 1, 2021. Details were announced in All Participant Bulletin 2020-19.

On September 21, Ginnie Mae announced in APM 20-12 that it would prohibit the inclusion of LIBOR-based HECMs in HMBS beginning on January 1, 2021.

“After further consideration of the impact of the COVID-19 pandemic on a lender’s ability to close HECM transactions that were initiated prior to the publication of APM 20-12, Ginnie Mae is hereby extending the deadline for securitization of new LIBOR-based HECMs,” says APM 2020-19.

Ginnie Mae says it will restrict the eligibility of new adjustable rate HECMs for securitization into any HMBS pool type that relies on LIBOR, including pool types “C AL” and “C ML,” effective with HMBS issued on or after March 1, 2021.

“This means that the first participation of any LIBOR-based HECM must be securitized into HMBS with an issue date of February 1, 2021 or earlier to remain eligible for securitization under Ginnie Mae’s program,” says APM 2020-19.