During a prepared speech at the Mortgage Bankers Association’s annual National Policy Conference in Washington, the US Department of Housing and Urban Development secretary Shaun Donovan said that starting in October or November, Ginnie Mae will allow lenders to securitize single loans and issue pool on a daily rather than a monthly basis.
“This will help smaller lenders access Ginnie Mae and FHA directly,” said Donovan. Typically Ginnie Mae issuers are large banks and has put smaller lenders at a disadvantage. During the speech, Donovan gave few details on the new Ginnie Mae program, but did say it has the technology and ability to allow lenders to deliver single loans that would eventually be pooled with other loans into a Ginnie Mae security.
Whether or not the new program would include the increasingly popular reverse mortgage MBS program that has taken off in the past year is unclear. Ginnie Mae has yet to respond to our request for comment.
FHA Commissioner David H. Stevens told the Washington Post that the single loans will be mixed into a pool of loans from multiple lenders. The policy changes will give smaller institutions “more flexibility and a competitive role in the lending process,” Stevens said.
The idea sounds great, but how it becomes a reality is unclear to me. According to our sources, Ginnie Mae hasn’t approved a new HMBS issuer in the last year, so how this is executed will be very interesting.