Ginnie Mae MBS Guide (5500.3, Rev. 1) Chapter 29 — Serial Note Pools — Special Requirements
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Ginnie Mae MBS Guide Chapter 29 — Serial Note Pools — Special Requirements
: 2007-10-01 This chapter describes special requirements that apply for a pool of single family, level payment mortgages that is pooled for the issuance of serial notes. 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 requirements, required pool submission documents, securities marketing disclosures, and administering pools. SN pools can be formed only under the Ginnie Mae I MBS Program. SN pools provide for the sequential retirement of securities units subject to the amount of principal available each month. Each sequentially numbered security unit has a face value of $25,000, except for the last unit, which may exceed that amount. If the amount collected on the scheduled principal due on the mortgages in any month, along with unscheduled recoveries of principal received during the reporting month and any previously undisbursed principal, is insufficient to retire a sequentially numbered serial unit that is scheduled to be retired in that same month, the Issuer must advance corporate funds in an amount sufficient to retire the serial unit as scheduled. If the scheduled principal due on the mortgages in any month, along with unscheduled recoveries of principal received during the reporting month and any previously undisbursed principal, is insufficient to retire any sequentially numbered serial unit that is not scheduled to be retired in that same month, then no serial unit is retired in that month.
Ginnie Mae MBS Guide Chapter 29 — Serial Note Pools — Special Requirements
: 2007-10-01 The mortgage eligibility and pool requirements that apply, with limited exceptions, to all pool types are found in MBS Guide, Ch. 9. The eligibility requirements for Ginnie Mae I SF mortgages found in MBS Guide, Ch. 24 apply for mortgages to be included in SN pools. The pool requirements for Ginnie Mae I SF pools found in MBS Guide, Ch. 24 also apply for SN pools, except as modified by this section.
Ginnie Mae MBS Guide Chapter 29 — Serial Note Pools — Special Requirements
REQUIRED DOCUMENTS The procedures and basic document requirements for all pools are found in MBS Guide, Ch. 10, 11, and 13. Section A. For Certification by Document Custodian
Ginnie Mae MBS Guide Chapter 29 — Serial Note Pools — Special Requirements
: 2021-07-28 The loan documents required for initial and final certification of an SN pool by the document custodian are the same as those discussed in the MBS Guide Ch. 13, Part 7. They are summarized in the following table:
Ginnie Mae MBS Guide Chapter 29 — Serial Note Pools — Special Requirements
, Rev. 1 29-1 ginniemae.gov Document Form Number Appendix For Initial Certification Schedule of Pooled Mortgages HUD 11706 III-7
Ginnie Mae MBS Guide Chapter 29 — Serial Note Pools — Special Requirements
, Rev. 1 29-2 ginniemae.gov Certification and Agreement, executed original HUD 11711B III-5 Original notes (or, in the case of modified loans, the original notes executed for the modifications) or other evidences of indebtedness, endorsed in blank, without recourse 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 policies) 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. For RD loans, Assignment and Assumption Agreement, if any Section B. For Approval by PPA and Ginnie Mae
Ginnie Mae MBS Guide Chapter 29 — Serial Note Pools — Special Requirements
: 2007-10-01 The SN pool documents required for approval by Ginnie Mae are the same as those discussed in MBS Guide, Ch.10, Part 3, except that, if a pool is submitted in paper submission format, the Issuer must also submit a prospectus, form HUD 1734 (Appendix IV-7), which must be modified, if appropriate, in accordance with the MBS Guide, Ch. 24, Part 2, § B(3)(b)(iii). The following table lists the pool documents to be sent to the PPA for approval of SN pools by Ginnie Mae. 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
Ginnie Mae MBS Guide Chapter 29 — Serial Note Pools — Special Requirements
, Rev. 1 29-3 ginniemae.gov Master Custodial Agreement HUD 11715 III-4 Prospectus (for pools submitted in paper format) HUD 1734 IV-7
Ginnie Mae MBS Guide Chapter 29 — Serial Note Pools — Special Requirements
: 2007-10-01 Preparation and delivery of the securities are described in MBS Guide, Ch. 12. The text of SN securities is set forth in Appendix IV-12. This section describes additional requirements for Issuers of securities backed by SN pools. Payments of interest must be made on the dates and in the manner specified in MBS Guide, Ch. 15 Payment of principal must be made, subject to the limitations set forth in MBS Guide Ch. 29, Part 5, § A and D, when accumulated scheduled principal and unscheduled recoveries of principal are sufficient to retire a serial note unit or units in sequential order. Each issue will consist of at least 100 but no more than 200 consecutively numbered units of equal amounts. The principal amount of each serial unit must be $25,000, except for the last unit, which may be in a principal amount greater than $25,000 but less than $50,000. A security holder or a beneficial owner of a serial note will have the option, upon request in writing to the CPTA, to convert its ownership interest in a single serial note to an interest in designated sequential serial notes evidencing lots of 25 units each (e.g., a serial note with 100 units may be converted into four separate serial notes each evidencing 25 sequentially numbered units) or to separate designated sequential notes each evidencing one serial note unit. Thereafter, such security holder or beneficial owner will have the option, upon written request to the CPTA, to convert its ownership interest in such serial notes evidencing individual units into a single serial note evidencing a note of 25 units or its ownership interest in four serial notes each evidencing 25 units into a single serial note. The maturity date of a serial note issuance will be the maturity date of the last serial unit to mature that is included in that issue, based on the amortization of the mortgage pool assuming no unscheduled recovery of principal. Example: Serial note unit 37 is part of a $2,500,000, 9% pool with 100 $25,000 units. Serial note 37 ($25,000) will be paid principal only after the preceding 36 serial notes (36 x $25,000 = $1,550,000) have been paid in full. That is, $1,575,000 will have to be paid on the mortgages in order for serial note 37 to be retired. Assuming no prepayments or other early recovery of principal on the mortgages, serial note 37 will pay off in 246 months.
Ginnie Mae MBS Guide Chapter 29 — Serial Note Pools — Special Requirements
POOL ADMINISTRATION General pool administration requirements for all pool types are described in MBS Guide, Ch. 14 through 20. This section describes additional requirements for the administration of SN pools
Ginnie Mae MBS Guide Chapter 29 — Serial Note Pools — Special Requirements
: 2007-10-01 The principal amount of each serial unit in a serial note issuance will be paid to the security holder no later than its stated maturity date, whether or not funds have been collected by the Issuer from the mortgagors. Section B. Investment of Undisbursed Collections
Ginnie Mae MBS Guide Chapter 29 — Serial Note Pools — Special Requirements
: 2007-10-01 Principal retained in the P&I custodial account in anticipation of full payment of a serial unit may be invested in certificates of deposit with FDIC or FSLIC-insured institutions or in time deposits with Federal Reserve System member banks that satisfy the rating requirements for funds custodians. These certificates of deposit or time deposit accounts must be payable in favor of the Issuer and/or Ginnie Mae. (Please See MBS Guide Chapter 16, Part 8) Section C. Monthly Reporting Requirements
Ginnie Mae MBS Guide Chapter 29 — Serial Note Pools — Special Requirements
: 2007-10-01 Monthly reporting on SN pools differs from reporting related to other pool types, as follows: Issuer’s Monthly Serial Note Remittance Advice, form HUD 11714SN (Appendix VI-11): Issuers must indicate the following for each serial note: (1) the amount of interest payable; (2) the principal balance outstanding; (3) the unit number and payment date of the last paid serial unit; and (4) the scheduled maturity date of the last paid serial unit. Section D. Surrender of Serial Notes at Maturity
Ginnie Mae MBS Guide Chapter 29 — Serial Note Pools — Special Requirements
: 2007-10-01 Each serial note that is held in certificated form and that represents a single serial unit must be surrendered prior to payment of the unit. Each certificated serial note that represents multiple serial units must be surrendered prior to the payment of the highest numbered serial unit represented by the serial note. The Issuer must send a notice to the security holder of each maturing serial note by the second business day of the month in which the payment retiring the serial note is due. This will give security holders of certificated securities sufficient time to surrender the serial note prior to the 15th of the month. Interest will not accrue for the period of any delay in the payment of a serial unit resulting from the failure of the security holder of a certificated serial note to surrender the serial note after proper notice, as specified above, has been given by the Issuer. Serial note certificates surrendered to the Issuer are to be delivered to the CPTA (Please See MBS Guide Addresses) with a letter of transmittal stating that the serial note has been retired.