Further, the minimum servicing fee for each GNMA II pool or loan package dropped to 19 basis points, representing the minimum note rate/security rate spread of 25 basis points minus the 6 basis points Ginnie Mae Guarantee Fee.
In effect, this lowered the servicing spread of note rates eligible for securitization within a GNMA II pool or loan package to 25 to 75 basis points above the security rate.
In support of its position, PSA cited that GNMA II securities, which contain buydowns, trade 6 to 10 basis points cheaper than GNMA I single-family securities.
For example, the wider range of coupons, the delayed principal and interest payment date to investors, and,the lack of liquidity in these securities, all contribute to altering the yield of the GNMA II security and are reflected in the price difference between GNMA I and II securities.
Loans were delivered into both GNMA I and GNMA II
Currently, Ginnie Mae's GNMA II program features securities backed by mortgage rates substantially higher than the security rate, with issuers receiving a variable servicing fee and investors paid on the 20th of the month.
When the changes are implemented, the GNMA II security will more closely resemble the agency's GNMA I security, a flagship of the mortgage finance market for more than 30 years.
Unlike the other secondary market agencies (prior to the adoption of their acknowledgment agreements), GNMA has expressly permitted the pledging of GNMA servicing provided the terms comply with the relevant terms of the GNMA Mortgage-Backed Securities Guide (Section 3-4 for GNMA I program and Section 5-8 for GNMA II
rehabber loans may now be pooled under the GNMA II
multiple issuer program.
We have made the GNMA II program more effective for all types of lenders," Rosenfeld said.
The changes also make GNMA II securities more attractive to investors.
Currently, the GNMA II
program features securities backed by mortgage rates substantially higher than the security rate, with issuers receiving a variable servicing fee and investors paid on the 20th of the month.