WASHINGTON, D.C. - Today, Ginnie Mae issued All Participants Memorandum 19-05 (APM 19-05), which announces the implementation of changes to pooling eligibility requirements for Department of Veteran's Affairs (VA) -insured or -guaranteed mortgages. This APM revises the pooling eligibility requirements applicable to all VA-guaranteed refinance loans and establishes new pooling criteria for certain cash-out refinances with loan-to-value ratios exceeding 90%, as outlined in the agency's previously published Request for Information. Effective with mortgage-backed securities guaranteed on or after November 1, 2019, High LTV VA Cash-Out Refinance Loans (those with LTV ratios above 90%) are ineligible for Ginnie Mae I Single Issuer Pools and Ginnie Mae II Multiple Issuer Pools. The exception is in cases when the loans are Permanent Financing Construction Loans, as defined in Chapter 24 of the MBS Guide.
High LTV VA Cash-Out Refinances may be pooled into Ginnie Mae II Custom Pools without restriction, provided they satisfy the seasoning and number of payment requirements detailed in Chapter 24, Part 2 § (A)(3)(d).
The new policy moves Ginnie Mae's MBS pooling eligibility requirements closer to that of Fannie Mae, Freddie Mac and the Federal Housing Administration (FHA). It also continues to provide veterans who use their earned benefit access to the government-guaranteed MBS market. Furthermore, it provides global investors with increased certainty in the performance of the Ginnie Mae security, which ultimately lowers mortgage rates for all borrowers served by the program.
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I think the Agencies are smelling a recession coming down wind. Both FHA and VA cutting back the max cash out LTVs.
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