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Ginnie Mae Close on Warehouse Aid

Washington-The mortgage industry is making headway on a proposal to have the Government National Mortgage Association aid the warehouse lending sector.

As press time officials from the Mortgage Bankers Association and the Warehouse Lending Project were set to hold what one participant called a "logistics" meeting with officials at the Treasury Department.

Also, MBA is hopeful that this week it will meet with Federal Housing Finance Agency director James Lockhart regarding Fannie Mae and Freddie Mac possibly buying participations in warehouse lines of credit or offering guarantees.

Mr. Lockhart told National Mortgage News last week that his agency is looking at "creative ways" to have the GSEs aid warehouse capacity. A spokeswoman for the agency added, "He's very aware of the issue."

The MBA wants the GSEs to either guarantee warehouse lines of credit or buy participations in existing loans. If the GSEs offer guarantees on large LOCs made to non-banks it would reduce to capital risk weighting on these loans to 20% from 100%, said MBA president John Courson.

In regard to Ginnie Mae, MBA has already pitched the idea of Treasury providing some type of backing for warehouse lines made to non-banks that are approved GNMA issuers. The loans would be secured by FHA, VA or other government-backed collateral.

MBA is calling its program GALF - Ginnie Mae-Administered Lending Facility.

The trade group has also floated the idea of GNMA buying loans earlier in the funding process, offering capital relief to banks making warehouse lines of credit.

GNMA officials have signed off on some of the MBA's ideas but now the issue rests with Treasury.

As reported by NMN, warehouse commitment volumes are not keeping pace with residential originations in the primary market, squeezing funders that have already been hurt by an exodus of warehouse banks from the business.

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