WASHINGTON, D.C. – Ginnie Mae announced today that investors in Ginnie Mae mortgage securities backed by Home Equity Conversion Mortgages (HECMs) can now take advantage of a new Platinum securities execution — the Home Equity Conversion Mortgages Backed Security (HMBS) Platinum securitization channel. The HMBS option eases the administrative costs of holding multiple (and typically smaller) HMBS securities and, in doing so, enhances the liquidity of the overall market for Ginnie Mae HMBS. The new Platinum HMBS option is the latest evolution in the modernization of Ginnie Mae’s Platinum securities program, which has been adding investor-focused functionality since 2017. Today, investors can create Platinum products using fixed-rate MBS (15- and 30-year mortgages); Weighted Average Coupon (WAC) Adjustable Rate Mortgage (ARM) and Jumbo Only Fixed mortgages.
The market adoption of the modernized process for Platinum products has been strong: prior to modernization, fiscal year 2017 production of Platinum securities with fixed-rate collateral was only $7.88 billion. Following modernization and automation inside the new MyGinnieMae portal, volume grew to more than $20 billion in fiscal year 2018.
“Today’s announcement is another important step on the path to continually modernize operations at Ginnie Mae to benefit MBS investors and Issuers,” said John Daugherty, SVP, Office of Securities Operations. “Making it simpler for investors to manage their portfolio of Ginnie Mae MBS and HMBS, while enhancing the liquidity of their Ginnie Mae investments, supports our mission to foster a strong secondary mortgage market for government mortgage loans, helping borrowers across the U.S, obtain the lowest mortgage rates an efficient market can offer.”
“Investors in Ginnie Mae MBS are the source of capital for homeownership in America and are essential participants in the success of Ginnie Mae’s mission,” added John Getchis, SVP, Office of Capital Markets. “Platinum HMBS securities give security dealers and institutional investors another choice when deploying their capital, and another way to support the secondary mortgage market.”
Modernization of Ginnie Mae’s technology and business processes is a key feature of the agency’ strategic plan. More of Ginnie Mae’s operational and technology modernization goals can be found in the Ginnie Mae 2020 white paper, and will be discussed at the upcoming Ginnie Mae Summit June 13-14.
About Ginnie Mae
Ginnie Mae is a wholly-owned government corporation that attracts global capital into the housing finance system to support homeownership for veterans and millions of homeowners throughout the country. Ginnie Mae mortgage-backed securities (MBS) programs directly support housing finance programs administered by the Federal Housing Administration, the Department of Veterans Affairs, the HUD Office of Public and Indian Housing and the Department of Agriculture Rural Housing Service. Ginnie Mae is the only MBS to carry the explicit full faith and credit of the United States government.
Ginnie Mae I MBS are modified pass-through mortgage-backed securities on which registered holders receive separate principal and interest payments on each of their certificates. Ginnie Mae I securities can include single family, multifamily, manufactured home and project construction loans.
Ginnie Mae II MBS are modified pass-through mortgage-backed securities for which registered holders receive an aggregate principal and interest payment from a central paying agent. An Issuer may participate in the Ginnie Mae II MBS either by issuing custom, single-Issuer pools or through participation in the issuance of multiple-Issuer pools, which combine loans with similar characteristics.