Ginnie Mae published APM 23-04, which reduces the minimum HECM Mortgage-Backed Security (HMBS) pool size, from $1 million to $250,000, to minimize the amount of time Issuers must carry balances between disbursement and HMBS securitization.
Tim Wilkinson, Vice President of Capital Markets and Pricing at Longbridge Financial and a member of NRMLA’s HMBS Issuers Committee, said, “We welcome Ginnie Mae’s latest announcement that allows for HMBS pools of as little as $250,000 down from the prior $1 million minimum. While this change will predominately benefit the tail securitization of smaller servicing books, any measure that increases the availability of liquidity in the HECM space is beneficial to the industry as a whole.”
The policy change becomes effective on April 1, 2023. Ginnie Mae said each pool must still contain a minimum of three participations, each of which is related to a distinct HECM loan in accordance with Chapter 35, Part 7 §E of the Ginnie Mae Mortgage-Backed Securities Guide, HUD Handbook 5500.3, Rev-1 (MBS Guide).
Ginnie Mae said it’s revising the MBS Guide Chapter 35, Part 7 §D and Appendix IV-29 (HMBS Base Prospectus) to incorporate the change.