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Lenders and other market participants generally seem to like Ginnie Mae's plan to consider single loans as pools under its Ginnie Mae II program starting in July and think it will increase their secondary market and loan resolution options, but they are not necessarily committing to using it yet.
"That's a really neat deal they're doing," said Bill Moffatt, who heads San Diego-based Plaza Home Mortgage's closed-loan channel. "Any time you can get...flexibility it's a good step in the right direction."
However, when it comes to the extent the program will actually be used, "it really comes down to price and execution."
Moffatt thinks there could be a "pretty big price differential" for loans delivered in this fashion based on the historical experience of somewhat similar Fannie Mae and Freddie Mac programs, as well as the fact that Ginnie Mae II pools generally trade at lower prices than their more homogenous Ginnie Mae I counterparts.
Bill Edwards, chairman of large Veterans Administration lender Mortgage Investors Corp., St. Petersburg, Fla., said while his company may not need Ginnie Mae's one-loan program now, he used the agencies' "cash window" to sell loans when he ran a smaller shop and found that pricing could be relatively less desirable than other alternatives at times. However, the program was still a nice option to have, he said. Based on his past experience he thinks "smaller players will probably find it helpful."
"There were times when we went to the window to see what we could do with a loan," Edwards said.
Tom Millon, president and chief executive...