Ginnie Mae on Monday released updated net worth and liquidity requirements for issuers of mortgage-backed securities.
The new requirements — which were announced at the Mortgage Bankers Association's annual conference in Las Vegas — are aimed at reducing risk in the corporation's MBS guarantee program.
"The market is changing rapidly in terms of the types of issuers and counterparties that Ginnie Mae is dealing with," said Ted Tozer, Ginnie Mae's president, in a press release Monday. "We have an obligation to be diligent in monitoring risk but we also want to attract global capital."
The new rules include higher standards for minimum net worth. Single-family issuers will be required to have a net worth at least $2.5 million, plus 0.35% of their outstanding single-family obligations — 15 basis points higher than current rules.
Ginnie Mae also modified its minimum liquidity requirements. Single-family issuers will be required to have liquid assets of either $1 million or 0.10% of their outstanding single-family securities, whichever is greater.
Current rules set minimum liquidity at 20% of an issuer's required net worth.
Additionally, Ginnie Mae announced that it will begin evaluating MBS issuers on a monthly scorecard. Each issuer will be measured against its peers on the basis of operational and delinquency management.
The new requirements are scheduled to take effect for new issuers on Jan. 1, 2015. Existing single-family issuers will be required to meet the requirements beginning Dec. 31, 2015.
