The Government National Mortgage Association is raising its net worth requirement for mortgage-backed securities issuers, requiring them to meet bank-like capital standards.

Nondepositories will be required to hold equity capital of 6% of total assets, according to Ginnie's president, Theodore Tozer.

Tozer is raising the net worth requirement to $2.5 million plus 1% for outstanding MBS between $5 million and $20 million and 0.2% above $20 million. The current net worth requirement is $1 million.

"To ensure that we continue to run a conservative and sound program, Ginnie Mae will soon raise its net worth requirements, and establish a liquid asset requirement for all single-family issuers," the Ginnie president said in a press release last week.

The agency expects issuers to maintain 20% of the net worth requirement in cash or cash equivalents "due to the capital intensive nature of servicing."

The higher-net-worth requirement will be phased in for existing issuers starting in September.

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