Ginnie Mae is raising its net worth requirement for MBS issuers, requiring them to meet bank-like capital standards.
Non-depositories will be required to hold equity capital of 6% of total assets, according to Ginnie president Theodore Tozer.
Tozer is raising the net worth requirement to $2.5 million plus 1% for outstanding MBS between $5 million and $20 million and 0.2% above $20 million. The current net worth requirement is $1 million.
"To ensure that we continue to run a conservative and sound program, Ginnie Mae will soon raise its net worth requirements, and establish a liquid asset requirement for all single-family issuers," the Ginnie president said in a prepared statement.
The agency expects issuers to maintain 20% of the net worth requirement in cash or cash equivalents "due to the capital intensive nature of servicing," Tozer said.
The higher net worth requirement will be phased in for existing issuers starting in September.
Separately, the agency reported that Ginnie Mae issuance of single-family and multifamily MBS totaled $37.8 billion in July, up 13% from the prior month. It is the highest issuance level since January.
The secondary market agency also reported that Ginnie issuers repurchased $13.3 billion in delinquent government-guaranteed mortgages out of Ginnie pools in the second quarter, down from $15.5 billion in first quarter