The restrictions were imposed as part of the company's anti-churn drive
Ginnie Mae has restricted lenders Freedom Mortgage, SunWest Mortgage, and NewDay USA from participating in certain of its securities programs.
The company said that under its regulations, an issuer who produces pools of loans or loan packages that consistently demonstrate prepayment activity that is substantially different from that of comparable loan packages or pools of loans will be contacted by the company for discussion and review.
As a result of the move, VA single-family guaranteed loans pooled by the three lenders are limited to Ginnie Mae II custom pools only. In effect, they are restricted from including VA single-family guaranteed loans in Ginnie Mae I securities or Ginnie Mae II multi-issuer securities.
Under the company’s guidelines, an issuer restricted from participation in multi-issuer pools may, at Ginnie Mae’s sole discretion, be permitted to again participate in multi-issuer pools once their loan packages or pools of loans perform consistent with comparable loan packages or pools of loans. Additionally, they must provide Ginnie Mae with an acceptable plan for achieving and maintaining prepayment speeds consistent with Ginnie Mae’s program requirements.
Freedom and SunWest remain approved Ginnie Mae issuers and remain authorized to pool FHA and RHS single-family insured mortgages in all eligible Ginnie Mae pool types. The restriction for both issuers of their VA single-family loans to Ginnie Mae II custom pools is effective for July 1 issuances and concludes with Jan. 1, 2019, issuances.
NewDay remains an approved Ginnie Mae issuer and remains authorized to pool FHA and RHS single-family insured mortgages in all eligible Ginnie Mae pool types. NewDay’s restriction to Ginnie Mae II custom pools commenced with its April 1 issuances and concludes with its Oct. 1 issuances.
Ginnie Mae said that the conclusion dates assume that the lenders have demonstrated to Ginnie Mae’s satisfaction that prepayment speeds are substantially more in-line with those of equivalent multi-issuer cohorts and that such improved performance is sustainable by the specified date.