Ginnie Mae MBS Guide (5500.3, Rev. 1) Chapter 27 — Graduated Payment Mortgage Pools And Loan
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Ginnie Mae MBS Guide Chapter 27 — Graduated Payment Mortgage Pools And Loan
: 2010-07-01 This chapter describes special requirements that apply for a pool or loan package of graduated payment mortgages. The requirements described in this chapter may modify, supplement or, in some cases, repeat for the purpose of emphasis those set forth in previous chapters with respect to mortgage eligibility, pool and loan package requirements, required pool and loan package submission documents, securities marketing disclosures, and administering pools and loan packages. The pool suffix is “GP” or “GT”. The two pool types may be referred to collectively as “GPM” pools or loan packages. GPM pools can be formed under both the Ginnie Mae I MBS Program and the Ginnie Mae II MBS Program. Graduated payment loans are loans on which monthly payments increase annually for a period of years. The two GPM pool designations have the following meanings: (1) “GP” identifies pools or loan packages of mortgages on which monthly payments increase annually for the first five years; and (2) “GT” identifies pools or loan packages of mortgages on which monthly payments increase annually for the first ten years.
Ginnie Mae MBS Guide Chapter 27 — Graduated Payment Mortgage Pools And Loan
MORTGAGE ELIGIBILITY, POOL, AND LOAN PACKAGE REQUIREMENTS The mortgage eligibility, pool, and loan package requirements that apply, with limited exceptions, to all pool types are found in MBS Guide, Ch. 9. The requirements for SF pools and loan packages found in MBS Guide, Ch. 24 also apply for GPM pools and loan packages, except as modified by this section. Section A. Mortgage Eligibility Requirements
Ginnie Mae MBS Guide Chapter 27 — Graduated Payment Mortgage Pools And Loan
: 2010-07-01 All of the following mortgage eligibility requirements apply to both GP and GT pools and loan packages. (1) Amortization: The amortization schedule of each pooled GPM provides for the deferred payment of a portion of the interest due monthly on the loan during its early years. This deferred monthly mortgage interest is recouped through the process of "negative amortization," that is, it is added monthly to the remaining principal balance of the mortgage. Deferred monthly mortgage interest is defined as the difference between the interest calculated on the outstanding security balance at the mortgage rate minus the scheduled payment due on the mortgage. If this amount is positive, it is added to the remaining principal balance of the mortgage; if it is negative, it is subtracted from the remaining principal balance of the mortgage.
Ginnie Mae MBS Guide Chapter 27 — Graduated Payment Mortgage Pools And Loan
A GPM must not require either repayment in equal monthly installments during the early years (the first 5 years for GP or 10 years for GT) or the commencement of amortization by the month following the issue date of the security. (2) Buydowns: GPM loans are not eligible for buydown consideration. (3) Refinance requirements: If a VA GPM loan is refinanced into another GPM loan, a new appraisal is required in order for the new loan to be eligible for pooling. If a VA GPM loan is refinanced into a fixed rate loan at a lower interest rate and no cash is taken out as a result of the transaction, no new appraisal is required in order for the new loan to be eligible for pooling. Section B. Pool and Loan Package Requirements
Ginnie Mae MBS Guide Chapter 27 — Graduated Payment Mortgage Pools And Loan
: 2010-07-01 (1) Minimum pool and loan package balances: As of the date of issue, each GPM custom pool, other than a pool formed pursuant to a BFP, must have an original principal amount of at least $500,000. As of the date of issue, each GPM loan package must have an original principal amount of at least $25,000. (2) Pool and loan package composition: Subject to MBS Guide, Ch. 27, Part 2, § A(2), a GPM pool or loan package must contain only GP mortgages or only GT mortgages.
Ginnie Mae MBS Guide Chapter 27 — Graduated Payment Mortgage Pools And Loan
REQUIRED DOCUMENTS The procedures and basic document requirements for submission of all pools and loan packages are found in MBS Guide, Ch. 10, 11, and 13. Section A. For Certification by Document Custodian
Ginnie Mae MBS Guide Chapter 27 — Graduated Payment Mortgage Pools And Loan
: 2021-07-28 The loan documents required for initial and final certification of a GPM pool or loan package by the document custodian are the same as those discussed in MBS Guide, Ch. 13, Part 7. They are summarized in the following table.
Ginnie Mae MBS Guide Chapter 27 — Graduated Payment Mortgage Pools And Loan
, Rev. 1 27-2 ginniemae.gov Document Form Number Appendix For Initial Certification Schedule of Pooled Mortgages HUD 11706 III-7 Release of Security Interest, executed original, if applicable HUD 11711A III-5 Certification and Agreement, executed original HUD 11711B III-5 Original notes (or, in the case of modified loans,
Ginnie Mae MBS Guide Chapter 27 — Graduated Payment Mortgage Pools And Loan
the original notes executed for the modifications) or other evidences of indebtedness, endorsed in blank, without recourse
Ginnie Mae MBS Guide Chapter 27 — Graduated Payment Mortgage Pools And Loan
, Rev. 1 27-3 ginniemae.gov For nonprofit agency section 203(k) loans, FHA affordable housing program letters For Final Certification Original recorded mortgages (or, in the case of modified loans, the recorded original mortgages, the related original notes, the modification agreements, and any required subordination agreements and/or title endorsements) All recorded interim assignments Evidence of good title (e.g., mortgage title insurance policy) Evidence of mortgage insurance or guaranty provided by FHA, VA, RD, or PIH (not required for manufactured housing). In lieu of an original MIC signed by FHA or LGC signed by VA, electronic confirmation from FHA Connection or VA’s TAS is acceptable. Section B. For Approval by PPA and Ginnie Mae
Ginnie Mae MBS Guide Chapter 27 — Graduated Payment Mortgage Pools And Loan
: 2010-07-01 The GPM pool and loan package documents required for approval by Ginnie Mae are the same as those discussed in MBS Guide Ch. 10, Part 3, except as modified below. (1) Schedule of Subscribers and Ginnie Mae Guaranty Agreement, form HUD 11705 (Appendix III-6), which must indicate in the block “Type of Issue” that the pool is to be “X,” “C,” or “M” and in the block “Pool Type” that the securities are to be either "GP" or "GT". (2) Schedule of Pooled Mortgages, form HUD 11706 (Appendix III-7), which must list in the column for Monthly Constant (P&I), just the fixed installment constant (FIC) applicable to the payment for the first month the loan is in the pool or loan package. (3) If a Ginnie Mae I pool or a Ginnie Mae II custom pool is submitted in paper submission format, a prospectus, form HUD 11747 (Appendix IV-5) or form HUD 11747-II (Appendix IV-22), which must be modified, if appropriate, in accordance with MBS Guide, Ch. 24, Part 2, § B(3)(b)(iii). (4) A BFP certification (Appendix III-12) if required pursuant to MBS Guide, Ch. 27, Part 2 and Ch. 24, Part 2, § B(2). The following table lists the pool and loan package documents required by the PPA for approval of GPM pools and loan packages.
Ginnie Mae MBS Guide Chapter 27 — Graduated Payment Mortgage Pools And Loan
, Rev. 1 27-4 ginniemae.gov Document Name Form Number Appendix Schedule of Subscribers and Ginnie Mae Guaranty Agreement HUD 11705 III-6 Schedule of Pooled Mortgages HUD 11706 III-7 Master Servicing Agreement HUD 11707 III-1 Master Agreement for Servicer's Principal and Interest Custodial Account HUD 11709 III-2 Master Agreement for Servicer's Escrow Custodial Account HUD 11720 III-3 Master Custodial Agreement HUD 11715 III-4 Prospectus (for Ginnie Mae I pool and Ginnie Mae II custom pools submitted in paper format) HUD 11747 or 11747-II IV-5 or IV-22 BFP certification, if required III-12 Section C. To Be Maintained by Issuer
Ginnie Mae MBS Guide Chapter 27 — Graduated Payment Mortgage Pools And Loan
: 2010-07-01 Graduated Payment Mortgage or Growing Equity Mortgage Pool or Loan Package Composition, form HUD 11748-A (Appendix VI-6). This pool or loan package composition listing provides the Issuer the information needed to determine the monthly fixed installment control for the pool or loan package at any future date.
Ginnie Mae MBS Guide Chapter 27 — Graduated Payment Mortgage Pools And Loan
THE SECURITIES AND MARKETING DISCLOSURE Preparation and delivery of the securities through the depository are described in MBS Guide, Ch. 12. The text of GPM securities held in certificated form is set forth in Appendix IV-11 for the Ginnie Mae I MBS Program and Appendix IV-25 for the Ginnie Mae II MBS Program. A partial statement of the terms of GPM securities held in uncertificated form is set forth in Appendix IV- 17 for the Ginnie Mae I MBS Program and Appendix IV-27 for the Ginnie Mae II MBS Program. This section describes additional information about, and requirements for, securities backed by GPM pools. Section A. Negative Amortization