The new effort am has been dubbed the MPF Government Mortgage-Backed Securities (MBS) and is aimed at “small issuers,” which may lack access to other secondary market options, Ginnie Mae said.
“Lenders will be able to choose whether to retain or release servicing on the government loans they originate and they will have a reliable channel for selling their loans that removes hurdles low-volume originators face in today’s competitive market” Ginnie Mae said.
The organization has not yet explained what those hurdles are, but a spokesman has said that the efforts pricing for the loans will be better than the pricing from Fannie Mae or Freddie Mac.
Ginnie Mae said the new program will initially be made available to eligible participating members of the Federal Home Loan Bank of Chicago in Illinois and Wisconsin before being rolled out more broadly next year.
“We are committed to supporting the mortgage activities of community lenders across the country that are members of the Federal Home Loan Banks,” said Matt Feldman, President of the Federal Home Loan Bank of Chicago. “This product will allow participating members to be more competitive in their communities and to provide them better pricing to enhance access to affordable mortgage financing in the communities they serve.” “This effort is an important move toward satisfying a critical strategic initiative of Ginnie Mae to find a way to expand access to our program to small lenders,” said Ted Tozer, President of Ginnie Mae. “The Ginnie Mae and FHLB Chicago partnership leverages the strengths of each of the institutions and will facilitate FHA, VA, and RD lending by small banks, some of whom are operating in areas where borrowers have had limited access to government loan programs.”