Ginnie Mae

Updated counterparty requirements recently coordinated with the Federal Housing Finance Agency affect a constituency that has kept growing, albeit at a slightly slower pace, according to new mortgage-backed securities research.

HUD official Alanna McCargo takes over the top job at the government corporation, which has had a series of acting leaders since 2017.

While overall volume was down in August, it remained historically strong, particularly in the securitized market for home equity withdrawal loans made to borrowers age 62 and up.

The guarantor has for the first time proposed a risk-based capital requirement for companies not subject to other federal regulation. The industry says the plan, which would impose a heavy charge for servicing portfolios, could drive lenders away from government-backed programs.

The volume of Ginnie securities issued in December marked the first time more than $80 billion has been issued in a month.

The deadline for inclusion in Ginnie mortgage-backed securities has been extended and an exception will be made for some participations.

Whether Ginnie issuance increases in the future may depend in part on the extent to which the Biden administration wishes to tap the FHA to promote affordable housing and homeownership.

Even government-sponsored enterprise loans, which have seen forbearance rates drop for 24 weeks in a row, saw a slight uptick.

Rates could be 50 basis points steeper than the MBA’s current projections, which anticipate the 30-year mortgage will average 3.3% next year, up from nearly 3% this year.

The sector’s leaders are hoping for better in 2021, while not forgetting lessons learned about the market’s risks in 2020.