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Ginnie Revises Re-Pooling Rule

Washington-Ginnie Mae has tightened its re-pooling requirements and starting Jan. 1 all workouts must be current before the loans can be placed in a Ginnie mortgage-backed security.

The secondary market agency for government-backed loans (FHA and VA) recently reminded Ginnie Mae issuers that they can buy back loans that are at least 90 days past due without written permission from Ginnie Mae.

In addition, servicers can use special forbearance and partial claims as loss mitigation options for Federal Housing Administration loans without taking the loans out of the pool.

"The purpose of this policy is to provide issuers with sufficient flexibility to employ appropriate loss mitigation strategies for borrowers at risk of foreclosure," according to a Ginnie memorandum.

But when the one-to-four family loans are re-pooled in Ginnie Mae I and Ginnie II MBS they must be current as of the issue date of the securities, according to the agency.

Currently, some loans could be 60 days delinquent, if the borrower had made one payment under a loss mitigation plan.

Ginnie acting vice president and chief risk officer Steve Ledbetter says the agency is rethinking and re-engineering a lot of its processes to stay ahead of curve.

"With the limited resources we have, it is really important for us to be smart about the processes we have in place and the technology we are using," Mr. Ledbetter said in an interview.

In trying to control risks, the agency has increased its net-worth requirement for new single-family issuers to $1 million. Existing issuers have to meet the higher net-worth limit by Oct. 1, 2010.

"It is all part of the same story to make sure we are on top of the increasing volumes and challenging environment facing the industry," Mr. Ledbetter said.

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