GNMA Says New MBS Program Will Help Warehouse

The Government National Mortgage Association says a recent change it made to its Ginnie II MBS program will help mortgage bankers with their warehouse lines of credit. "Lenders will be able to better utilize warehouse lending lines and reduce interest costs associated with carrying loans until they can be securitized and settled," said Ginnie Mae president Theodore Tozer. Beginning this fall, issuance for Ginnie II multiple issuer pools can occur daily, rather than once a month. Also, mortgage bankers can submit just one loan for securitization, eliminating the current three-loan minimum. Another wrinkle to the program will allow seller/servicers to submit "orphan loans" which are individual mortgagees that normally may not fit into a certain pool because the note rate differs significantly (at least 50 basis points) from other loans in the pool. In general, banks have been more willing to extend warehouse credit to nonbanks over the past six months, but only on Fannie Mae, Freddie Mac, and FHA/VA products.