Citing "recent industry and market conditions, Ginnie Mae said it will raise the bar for issuers of its mortgage-backed securities.
In a memo to lenders dated Friday, Michael Frenz, executive vice president at Ginnie, said that by Oct. 1 of 2010 all issuers of its single-family MBS must have a net worth of at least $1 million, quadruple the current requirement for most single-family issuers and double that for reverse mortgage lenders.
In addition, beginning Oct. 1, all new issuers will be subject to a one-year probationary period beginning with the first MBS issuance or acquisition of servicing rights on a Ginnie Mae pool.
During this period, Ginnie will keep close tabs on performance measures like delinquencies and early payment defaults, and it will conduct an onsite review of the issuer within the first six months.
