Street analysts said that recently announced changes to the GNMA II securitization program would give many lenders added flexibility in originating and securitizing Ginnie Mae loans, thereby enhancing issuance in the GNMA II sector.

These modifications in the program include changes in the minimum servicing fee in each pool to 19 basis points from 44 basis points (which could also be compared to 25 basis points for conventional pools) and modifications in the eligible note rates to 25 and 75 basis points over the pool coupon from the current 50 to 150 basis points. The changes also state that buydown loans can no longer be more than 10% of a multi-issuer pool.

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