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Ginnie Mae announced this week that it is adding new pool-level low-moderate income (LMI) disclosures to its Home Equity Conversion Mortgage (HECM) Backed Securities (HMBS) program.
The move is part of the company’s continued efforts to improve its securities disclosures, which began in 2021, according to the company’s announcement.
new disclosure
“Ginnie Mae’s new HMBS LMI disclosures cover pooled active loans from 2012 to the present,” the announcement said, which covers a large portion of the history of the HMBS program.
The expansion “continues Ginnie Mae’s efforts to strengthen securities disclosure” that began when the Biden administration took office in 2021. The addition of new HMBS disclosures builds on concrete efforts over the past year, and Ginnie Mae credited progress on its securities program with “many accomplishments.” ”
These include creating security-level LMI disclosures across the single-family program, publishing Ginnie Mae’s social impact and sustainability framework and updating the prospectus.
“These disclosures are an integral part of Ginnie Mae’s response to increased investor interest in increased transparency for Ginnie Mae mortgages within its pools, with a particular focus on meeting environmental, social, and governance (ESG) investment obligations. portion,” the company said.
HMBS’s role in ESG investing
Sam Valverde, Ginnie Mae’s principal executive vice president, said the initiative is aimed at increasing transparency so investors can more accurately influence their choices.
“As interest in social impact investing continues to grow, Ginnie Mae will provide more data on the loans underlying our securities to help investors make better-informed decisions,” Valverde said in a statement. We are looking for ways to do so.” “The disclosures announced today reflect the unique impact of our HMBS program in promoting retirement security for low-income families.”
New disclosure data will be “published on the sixth business day of each month for the previous month’s issue and will be available on the Disclosure Data Download section of the Ginnie Mae website,” the announcement states.
In an interview with RMD late last year, Ginnie Mae President Alana McCargo supported the idea that HMBS pools have a “social” aspect.
“The HECM MBS program is inherently social in that it supports older adults as they age gracefully,” McCargo said in an interview published in December. “Therefore, we feel that this is very social and is at the core of our charter and mission and has a lot of value and benefit for investors. I think there’s an opportunity. What we need is more products to be original.”
Recent developments in the HMBS program
Ginnie Mae has made several revisions to the HMBS program over the past 18 months, particularly since taking over management of service operations. reverse mortgage financing (RMF) after bankruptcy in late 2022.
The company announced the development of a new HMBS product in January 2024. Last year, the company announced a policy to allow the securitization of multiple participations related to a particular HECM in a single issuance month and reduce the minimum size required for HMBS pools.
Ginnie Mae also faces challenges stemming from its underwriting of RMF portfolios, including an investigation by the Office of Inspector General (OIG) into its handling of RMFs.And that’s part of the ongoing lawsuit texas capital bank In a lawsuit over the extinguishment of liens on collateral backed by reverse mortgages, a judge recently said the case could proceed primarily to trial.
Ginnie Mae also recently received increased budget authority after it expressed concerns about its ability to manage its RMF portfolio with previously authorized funds. But the White House’s recent budget proposal to Congress calls for more funding.
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