Ginnie accelerates issuer buyouts in response to storms
Ginnie Mae is giving expanded loan buyout authority to certain issuers in order to help them remove loans affected by Hurricanes Irma and Harvey from securitized mortgage pools.
Ginnie will allow issuers with a certain percentage of collateral pool properties affected to request approval to buy out loans if borrowers are in distress or properties are damaged due to the storms. The buyout authority extends through March of next year.
"The purpose of this action is to facilitate the ability of our issuers to provide relief to borrowers as provided for by the federal agencies that guarantee the loans in Ginnie Mae securities," Michael Bright, Ginnie Mae's acting president, said in a press release.
"In extraordinary situations such as this, accelerating buyout authority allows issuers to render assistance more quickly than under standard program guidelines," Bright said.
The expanded buyout authority is among the ways Ginnie is fulfilling an earlier offer to assist issuers that had more than 5% of collateral pool properties affected by Hurricane Harvey, and a subsequent extension of that relief after Hurricane Irma.
Ginnie has promised to help issuers make pass-through payments to investors on loans with forbearance and delete affected loans from delinquency ratio calculations as well as buy out affected loans from securitized pools.
Forecasts suggest that the securitized mortgage markets could have larger-than-usual exposures to the particularly strong hurricanes this season, particularly Irma.
Large hurricanes such as these recent storms can put stress on Ginnie issuers that are responsible for advancing mortgage payments to investors.