Ginnie Mae has announced a change in the Servicing Fee Margin for HECM mortgage-backed securities (HMBS). Under the current program, Issuers are provided two different servicing compensation methods, a monthly flat fee or a basis point strip of the interest. APM 11-06, which takes effect as of July 1, 2011, will revise the margin to a single option where Issuers must select a basis point strip.
The new plan will require that the Servicing Fee Margin that is added to the note rate of the HMBS must be at least 0.36 percent (36 bps), but not more than 1.50 percent (150 bps), including the Ginnie Mae Guaranty Fee of six bps.
| Current Servicing Compensation Methods | Effective for July 1, 2011 and Forward |
| 1. Monthly Flat Servicing Fee (6-25 bps) |
1. No longer an option |
| 2. Basis point Servicing Fee (25-75 bps) |
2. Basis point Servicing Fee (36-150 bps) |
Ginnie Mae expects to have the revisions to the Ginnie Mae Mortgage-Backed Securities Guide 5500.3, Rev. 1 (Guide), currently posted under the “What’s New” section of Ginnie Mae’s website, officially incorporated in to the guide prior to the July 1 effective date.
