Ginnie Mas has announced changes to the pooling eligibility requirements for Department of Veteran’s Affairs (VA)-insured or -guaranteed mortgages.
The implementation is pursuant to the Loan Seasoning for Ginnie Mae Mortgage-Backed Securities provision in the Economic Growth, Regulatory Relief, and Consumer Protection Act. Ginnie Mae said it expects the law to help curb abuses related to certain refinance programs utilized by veterans.
Under an All Participants Memorandum, Ginnie Mae said that for a refinance loan insured or guaranteed by the VA to be eligible for Ginnie Mae securities, the loan’s note date must be on or after the later of 210 days after the date on which the first monthly payment was made on the mortgage being refinanced and the date on which six full monthly payments have been made on the mortgage being refinanced.
While the new requirements affect security issuances on or after June 1, they do not otherwise affect the guaranty or composition of MBS issued before that date.
Following the implementation, refinances that do not meet the condition defined in the memorandum, including refinances that closed prior to the date of the announcement, are ineligible for inclusion in any new pool or loan package in the Ginnie Mae I or Ginnie Mae II MBS Program. The company said it is engaging with issuers to implement a cure for pools that have been submitted with non-compliant loans.
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