Ginnie Mae later this month will start providing MBS investors with new information about the percentage of modified single-family mortgages in its MBS pools.
The secondary market agency is taking the step to alleve concerns that some of its securities were packed with modified Federal Housing Administration (FHA)-insured loans, which resulted in high redefault rates and increasing pre-payment speeds.
"Starting mid-November, investors will be able to go to Ginnie Mae's website and see the concentrations of modification loans in particular pools," Ginnie Mae president Theodore Tozer told ASR sister publication National Mortgage News (NMN).
Looking into the recent increase in pre-payment speeds, Ginnie executives found that some Wall Street dealers "were paying up" for pools of modified loans.
These investors assumed that borrowers with newly modified loans could not refinance again, Tozer told NMN. "That's why we decided to go with reporting of modified loans because the dealer was asking for it," he said.
The new disclosures will provide investors with not only the percentage of modified loans in GNMA pools, but information on purchase and refinanced loans. The pool information will be continually updated each month.