[1]Ginnie Mae [2] has released an update to its issuer business status requirements as part of their ongoing effort to update requirements and infrastructure for its mortgage-backed-securities (MBS) program.
An announcement from the government corporation on Tuesday revealed new changes that will help issuers that are going through ownership and organizational changes as the result of changes within the housing finance industry and secondary mortgage market.
“The housing finance industry is continuing to evolve in response to changes in the economic and regulatory environment, and Ginnie Mae must evolve with the industry,” said Michael Drayne, Ginnie Mae’s SVP of Issuer and Portfolio Management.
The four updates will affect business operations for many of Ginnie Mae's issuers and include changes to the requirements for notification and prior approval of changes in issuer business status.
These changes are intended to increase efficiency within business practices for both issuers and Ginnie Mae.
“Our rapid increase in volume, coupled with the growing complexity of the business operations of our Issuers, means that Ginnie Mae must be very responsive as it continues to support the industry,” Drayne said.
The revised requirements are effective immediately.
The Ginnie Mae MBS Guide updates:
- Changes in Relationship with Regulatory Agencies – Written notice must be provided to Ginnie Mae if an Issuer is the subject of a material adverse change in its business relationship with the Federal Deposit Insurance Corp., Consumer Financial Protection Bureau, or a state regulatory agency.
- Mergers – Notification deadlines for the submission of documents have changed pre- and post-merger. Additionally, the number of legal and financial documents required during a merger has been reduced.
- Change in Ownership or Control of an Issuer or Guarantor – The definition of a “change in ownership or control” will now be consistent with the Statement of Financial Accounting Standards No. 57 (FAS-57) issued by the Financial Accounting Standards Board. Additionally, the number of legal and financial documents required during a change in ownership or control has been reduced.
- Transfer of Assets – Issuers planning on executing a transfer of assets must provide Ginnie Mae written notice regarding the transfer at least thirty (30) days prior to the desired effective date.
Click here [3]to view more detailed information about the changes in Issuer business status can be found in Chapter 3 of the Mortgage-Backed Securities Guide 5500.3, Rev.1 (MBS Guide). [3]