Ginnie Mae has clarified its role during the government shutdown, a week after the government discontinued appropriations to many of its departments.
While the agency has reiterated it will continue to perform necessary functions including granting of commitment authority, issuance of Ginnie Mae-guaranteed mortgage-backed securities and REMICs, Ginnie Mae issued a notice to clarify questions from industry partners on Tuesday.
“In addition, Ginnie Mae has received industry questions about Issuers’ ability to pool certain single family loans during the lapse in appropriations,” Ginnie Mae wrote in the release. “To be clear, single family loans continue to remain eligible for securitization so long as they meet requirements for insurance/guaranty of the insuring/guaranteeing agency when they are pooled and are in the process of being insured or guaranteed.”
Ginnie Mae specified one example involving USDA loans, which require certain approvals before being pooled.
“The United States Department of Agriculture (USDA) requires that lenders obtain conditional commitments from USDA in order to close a Rural Development (RD) single family loan that will be guaranteed by USDA,” Ginnie Mae writes. “Where an RD loan has closed consistent with a valid conditional commitment from USDA, the loan may be pooled to back a Ginnie Mae –guaranteed security, notwithstanding that the final issuance of the guarantee may be delayed due to a lapse in appropriation.”
The agency is accepting questions from lenders to ensure it is continuing to meet essential needs during the shutdown, which has been under way for more than a week after its start on October 1.
Written by Elizabeth Ecker