In a Nutshell
- On April 10, 2020, Ginnie Mae issued All Participants Memorandum (APM) 20-03, implementing its new PTAP/C19 program for the COVID-19 national emergency, which revises and expands its Issuer assistance programs in Chapter 34 of the MBS Guide. One of the overarching aims of the program is to help address the lack of liquidity facing nondepository mortgage servicers nationwide as a result of forbearance of borrowers’ payments.
- PTAP/C19 funds may be used only to cover shortfalls in the P&I owed to MBS security holders associated with loans that are delinquent, which includes loans in forbearance, as of the date that each request for assistance is submitted. PTAP/C19 funding may not be used to cover other Issuer operational or servicing costs. If an Issuer’s request is approved, Ginnie Mae will advance funds directly to investors.
- Although PTAP/C19 currently covers only single-family issuers, Ginnie Mae indicates it expects to publish terms for reverse mortgage and multifamily issuers in the near future.
Authority
- Chapter 34, Part 2, Section E of the Ginnie Mae Mortgage Backed Securities Guide and Ginnie Mae All Participants Memorandum (APM) 20-03.
Documents Required to Request Assistance
- Issuers must execute and submit the following documents when the first monthly request for Ginnie Mae assistance is made under PTAP/C19:
- A single copy of the Request for Pass-Through Assistance Related to COVID-19 and Repayment Agreement (Request and Repayment Agreement), properly executed by an authorized corporate official identified in the form HUD 11702 for the Issuer;
- Two copies of the Master Supervisory Agreement, properly executed by an authorized corporate official; and
- A signed statement, on the Issuer’s letterhead, articulating the Issuer’s previous efforts in obtaining private financing or other assistance for the subject shortfalls as well as the Issuer’s plan for repaying any funds advanced by Ginnie Mae.
Note: Ginnie Mae may request additional supporting documentation. Also, once an Issuer receives PTAP/C19 funding from Ginnie Mae for an initial remittance cycle, for subsequent cycles for which assistance is sought, the Issuer will only be required to submit a new Request and Repayment Agreement and any other supporting documentation required by the Master Supervisory Agreement, or otherwise requested by Ginnie Mae.
Deadlines for Requests
- Requests must be submitted no earlier than the 5th business day of the month and no later than the 6th business day of each month.
- If Ginnie Mae requires additional documentation, it must be provided within the timeline identified by Ginnie Mae in the Master Supervisory Agreement, or as otherwise required by Ginnie Mae in writing.
Limits on Requests, Submission and Physical Copy Requirements
- Issuers may request PTAP/C19 assistance only once per month to cover shortfalls on the principal and interest (P&I) due MBS holders the month that the request is made.
- Requests must be submitted via email to PTAP@hud.gov, and the email subject line must include the Issuer ID, Issuer Name, and the month and year of the request.
- Issuers must also retain physical copies of the Master Supervisory Agreement and Request and Repayment Agreements bearing wet signatures, which must be mailed to Ginnie Mae upon request.
Notification of Approval and Deposit of Approved Payment
- Ginnie Mae will evaluate each PTAP/C19 request in the month requested and retains sole discretion to approve or reject requests submitted in subsequent months.
- Ginnie Mae will notify the Issuer in writing of its determination to approve or reject the request for assistance no later than one business day prior to the date that the corresponding monthly remittance payment is due.
- After the Issuer and Ginnie Mae have executed the Request and Repayment Agreement, and no later than the date the corresponding monthly remittance is due, Ginnie Mae will deposit the approved Payment via ACH transfer directly into Central P&I Custodial Account identified in the Form HUD 11709 and Form HUD 11709A in effect for the Issuer on the date the Issuer submitted the Request and Repayment Agreement.
Use of Approved Payment
- As indicated, PTAP/C19 funds may be used only to cover shortfalls in the P&I owed to MBS security holders associated with delinquent loans, which includes loans in forbearance, as of the date that each request for assistance is submitted. PTAP/C19 funding may not be used to cover other operational or servicing costs of the Issuer.
Repayment of Funds (including interest rate)
- Each monthly disbursement made by Ginnie Mae under PTAP/C19 is governed by the Master Supervisory Agreement and all related Request and Repayment Agreements.
- The Ginnie Mae advance associated with each Repayment Agreement, together with interest, will be due on the last calendar day of the month that is the seventh month from the month in which the corresponding investor remittance was made, or on July 30, 2021, whichever is earlier.
- If the last calendar day of the month falls on a weekend or a public holiday, the payment will be due on the last business day before this last calendar day of the month.
- Assistance advanced by Ginnie Mae will bear a fixed rate of interest, and the rate that will apply to a given month’s pass-through assistance to all Issuers will be posted on Ginnie Mae’s website on the second business day of each month.
Seniority of Obligations to Repay Funds
- In the event of default, repayment of third-party financed servicing advances is subordinate to repayment of advances made by Ginnie Mae under PTAP/19 as provided under the Master Supervisory Agreement Requirements.
Links to the applicable documents can be found here.