Ginnie Mae Delays Issuers’ Risk-Based Capital Requirement to Dec. 2024

Ginnie Mae on Friday said it would extend its mandatory implementation date of its risk-based capital requirement by one additional year, to Dec. 31, 2024.

“The state of the U.S. housing market is evolving rapidly, and housing affordability has eroded nationwide, with first-time homebuyers and lower income households that Ginnie Mae exists to serve feeling the effects most acutely,” said Ginnie Mae President Alanna McCargo. “Our Issuers and the mortgage servicing industry are integral to the government mortgage system, and they are also adapting and adjusting to market conditions. As always, we are focused on working with our counterparties to manage risks and ensure continuity in serving the most underserved households through all economic cycles.”

Mortgage Bankers Association President and CEO Bob Broeksmit, CMB, released the following statement:

“MBA appreciates Ginnie Mae’s decision to delay the implementation date of its RBC requirement for one year. Given current economic and mortgage market conditions, the extra time allows for continued dialogue and a much-needed comprehensive analysis to fully assess its impact.

“While MBA and its members have worked constructively with Ginnie Mae to develop stronger capital and liquidity standards to ensure the safety and soundness of Ginnie Mae issuers, we have stressed, since August 2021 when the RBC concept was first introduced, that the punitive treatment of mortgage servicing rights could result in reduced liquidity of MSRs and could limit lenders’ ability to serve borrowers in the Ginnie Mae servicing space.

“MBA has led efforts to address concerns about the RBC standard, engaging with Ginnie Mae in a thoughtful, data-informed discussion about the possible adverse impact on the Ginnie MSR market, and the implications for first-time, low- and moderate-income, and veteran homebuyers. We appreciate the dialogue with Ginnie Mae and will continue our work to ensure that the mortgage system remains safe without causing undue harm or higher costs to borrowers.”

Ginnie Mae’s Issuer Eligibility Requirements were first published on August 17, 2022 in APM 22-09 through a joint announcement with the Federal Housing Finance Agency of amended minimum financial requirements for IMB Issuers in government securitization guaranty programs. 

The RBC requirement is part of a larger set of financial eligibility guidelines released simultaneously with Federal Housing Finance Agency requirements on August 17, 2022. Ginnie Mae said the RBC requirement is an important component of measuring risk, designed to strengthen and bolster the Issuers that support the government mortgage market.

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Ginnie Mae APM 22-09