The second annual Ginnie Mae Summit opened today in Washington with a keynote speech from the new Secretary of Housing and Urban Development Julian Castro and proceeded with several important announcement from Ginnie Mae President Ted Tozer.
Castro called on the housing industry including, he said, lenders that "We need to work together to see a robust, healthy housing market where those who are ready can buy a home. Our nation is making progress across the board, and HUD is focused on ensuring these opportunities reach every American."
Tozer said that Ginnie Mae's primary goal now as in the past is to protect and preserve the "utility, relevance and remarkably successful track record of the Ginnie Mae MBS program. The agency's pioneering role in the creation of a securities market for mortgage loans, its continued ability to refine the program as necessary to maintain its unblemished record of profitable operation over decades of market change and disruption is a testament to the power of a well-conceived and executed government effort to support the healthy functioning of a sizable and critical private sector function."
During the summit Ginnie Mae will unveil a position paper outlining from Ginnie Mae's perspective the major issues presented by the transformation in mortgage lending coming out of the financial crisis, Tozer said.
Ginnie Mae also announced the following:
- It is making final changes to its Net Worth and Liquidity Requirements. Detailed information on these changes and when they will take effect will be announced at the Mortgage Bankers Association Annual Convention in October.
- Enhancements are being made to Ginnie Mae's Acknowledgement Agreement. The changes are designed to help balance the needs of the lenders to issuers and Ginnie Mae's risk management and make the Agreement more widely used. The enhancements will help expand liquidity by enabling issuers to further use mortgage servicing rights (MSRs) as collateral.
- Ginnie Mae expends a significant amount of resources in the review of applications for new issuers and in compliance monitoring of issuers' activities,-even issuers that have not issued securities. In order to most effectively utilize resources, Ginnie Mae has decided to adopt a Dormant Issuer Policy whereby issuers must actively participate within an 18-month timeframe. The first evaluation will take place on January 1, 2015.
- The Federal Home Loan Bank of Chicago (FHLBC) and Ginnie Mae have launched a pilot program to give small financial institutions more access to the secondary market. The program allows FHLBC to issue securities guaranteed by Ginnie Mae. FHLBC is expected to begin issuing securities, backed by mortgages originated by member financial institutions as early as November, 2014.
Ginnie Mae said its Summit is an opportunity for all of its stakeholders (issuers, document custodians, and other federal agencies) to become familiar with the Ginnie Mae business model, operations and plans, and to get a first glance at some of the corporation's major initiatives, program changes and developments that are occurring. This event also gives stakeholders an opportunity to provide feedback and make recommendations directly to Ginnie Mae.