Ginnie Seeks Comment on Servicing Fee Deals

Ginnie Mae, which issued the first mortgage-backed security in 1970, is seeking public comment on its initiative to guarantee securitizations of excess servicing fees for the first time."The Excess Yield Program will allow qualifying Ginnie Mae issuers to reduce the amount of mortgage servicing rights on their balance sheets," the proposed rule says. Securitizations would reduce the capital and hedging costs associated with holding MSRs. And Ginnie officials hope it will make the Ginnie Mae program more attractive to lenders and servicers. "The Excess Yield Program should lower costs of, and encourage the origination of, government-insured and guaranteed loans that back Ginnie Mae MBS," the proposal says. "This will directly benefit low- and moderate-income borrowers and further Ginnie Mae's mission of expanding affordable housing." The comment period on the proposed rule ends Nov. 14. Ginnie guarantees mortgage securities backed by Federal Housing Administration, Department of Veterans Affairs, and Rural Housing Service home loans.