Citing "recent industry and market conditions," the Government National Mortgage Association said it will raise the bar for issuers of its mortgage-backed securities.
In a memo to lenders dated Friday, Michael J. Frenz, an executive vice president at the agency better known as Ginnie Mae, said that by Oct. 1, 2010, all issuers of its single-family securities must have net worth of at least $1 million, quadruple the current requirement for most single-family issuers and double that for securitizers of reverse mortgages.
The net worth minimum for issuers of multifamily securities will remain $500,000, Mr. Frenz wrote.
In addition, he wrote, starting next month all new issuers will be subject to a one-year probationary period beginning with the first securities issuance or acquisition of servicing rights on a Ginnie pool. During this period Ginnie will keep close tabs on performance measures like delinquencies and early-payment defaults, Mr. Frenz wrote, and it will conduct an on-site review of the issuer within the first six months.
April issuance of Ginnie mortgage-backed securities nearly tripled from a year earlier, to $19 billion, the biggest monthly total since September 2003.