Ginnie Mae is extending the deadline for delinquency reporting exemptions and for alternative audit procedures
Ginnie Mae announced last week that it is extending certain pandemic-era policies, including delinquency reporting exemptions.
Delinquency reporting exemptions were set to expire at the end of July, but Ginnie Mae said issuers now have until Jan. 31, 2023. It also said that alternative audit procedures will be accepted until it’s “practicable for issuers.”
The guarantor for federally backed loans said that it chose to shift deadlines for these policies because the pandemic is continuing to have an impact on both issuers and borrowers.
“In order to continue protecting the healthy functioning of the housing finance market as the impact of COVID-19 lingers, issuers still need these prudent flexibilities to help manage persistent operational challenges,” said Alanna McCargo, president of Ginnie Mae, in a statement.
Ginnie’s delinquency reporting exemptions were first announced in mid-2020. At the time, the guarantor said it would exclude any new issuer delinquencies occurring on or after April 2020 in recognition that delinquency rates would likely swell in response to government-mandated forbearance.
Normally, issuers that fail to maintain delinquency rates below applicable threshold levels are subjected to Ginnie Mae sanctions.
Regarding alternative audit procedures, Ginnie said that it will continue to accept audited financial statements from issuers where the auditor relies on alternative documentation in lieu of doing a physical inspection as required by the Department of Housing and Urban Development. For now, these types of statements will be accepted from issuers with a fiscal year ending on or before Sept. 30, 2022.
Ginnie said that issuers must ensure that the audited financial statement documentation submitted to the guarantor details the condition necessitating the use of an alternative procedure, a description of the alternative procedure used, and the independent auditor’s rationale outlining how the alternative procedures met the original objective of the document custodian review audit.