Ginnie Mae further streamlines advanced loan modifications
Friday afternoon, ginnie mae issued a new memorandum (APM 22-01) stating that they are streamlining its documentation requirements for servicers participating in the Federal Housing Administration’s (FHA) Advanced Loan Modification (ALM) program.
The memo removes the requirement for registration and title insurance in some cases.
The new policy supports “the current administration’s goal of helping owners affected by the pandemic get on the path to economic recovery” by creating a more efficient process so repairers can help more owners move on. from abstention to permanent modification.
The change comes after the expansion of digital signature use on documents in November and the expansion of long-term mortgage MBS pools, consisting of mortgages of up to 480 months, in December.
“In order to fully stabilize the economy, issuers need as many tools as possible to help owners recover from the economic effects of the pandemic,” said Ginnie Mae President, Alanna McCargo. “This policy gives issuers clear guidance on how to move forward to help the tens of thousands of FHA homeowners coming out of forbearance to benefit from the FHA Advance Loan Modification.”
According to the memo, under the new simplified policy, the issuer is required to provide the following documents to the document custodian:
- Fully signed original loan modification agreement signed by all borrowers and in recordable form.
- If the issuer determines that registration is necessary to maintain an enforceable first lien position, or if the loan modification agreement contains lease or rent assignment clauses, the modification must be registered for certification final.
- If the amendment is registered, the issuer must also comply with the title insurance requirements of Chapter 24, Part 2, §A(2), as well as obtain the necessary title policy or endorsement and subordination(s). (s) as indicated on the title.
- The amended loan file must clearly identify to the Document Custodian that it is an ALM.
Document custodians will not be required to verify that the ALM is registered, unless the loan modification agreement contains provisions for the assignment of leases or rents, or title insurance is present . However, if the ALM loan modification agreement is registered, title insurance that meets the requirements of Chapter 24, Section 2 is required.
Simplified documentation requirements for ALM loans will end with pooled issuances on June 1, 2023. ALMs in pooled issuances on or after July 1, 2023 must meet Ginnie Mae’s standard registration and title insurance.