Ginnie Mae Issues Guidance on Loans After Deferment Loss Mitigation

Ginnie Mae recently issued APM 20-13, reminding Issuers that a deferment, exercised as a loss mitigation option or as part of an informal workout agreement, may impact pooling eligibility under existing MBS program requirements.  Ginnie Mae released AM 20-13 in light of VA Circular 26-20-33, which clarified the circumstances when a deferment may be offered as a COVID-19 loss mitigation option after a forbearance period.

In APM 20-13, Ginnie Mae clarifies that for pooled loans, the deferment loss mitigation option can be exercised without repurchasing the loan from the pool.  After a deferment has been exercised, Issuers can treat such loans as current for purposes of investor accounting and pool and loan reporting.  Ginnie Mae notes that repurchasing the loan from the pool prior to exercising the deferment may subject the loan to existing re-pooling restrictions.

Loans that are not pooled at the time deferment is exercised become Re-Performing Loans and are subject to the temporary pooling restrictions outlined in APM 20-07.  Ginnie Mae also reminds Issuers that the MBS program requirements prohibit Issuers from delivering mortgages that combine the deferment option with a loan modification.