Ginnie Mae has restricted loanDepot from including VA loans securities due to what it considered faster than average prepayment speeds.

The lender “respectfully disagrees” with the restriction, according to a press release from loanDepot. It is restricted from including VA single family guaranteed loans in Ginnie Mae I or Ginnie Mae II multi-Issuer securities. The restriction began February 1 and is slated to conclude July 1, according to Ginnie Mae.

The restrictions are part of an ongoing efforts to enforce Section 3-21 of Ginnie Mae’s MBS Guide. It establishes as a required program risk parameter that an issuer’s “origination and servicing practices…ensure that the performance of an Issuer’s securities is in line with that of similarly constituted securities for the Ginnie Mae portfolio as a whole.”

However, loanDepot, an approved issuer and servicer, can pool other Ginnie Mae products and can place Veterans Affairs loans into custom pools.

Prior to the government shutdown, LoanDepot had for several months been discussing with Ginnie Mae its prepayment experience on Veterans Affairs loans. The aim of those conversations was to help ensure its “prepay speeds on all [Ginnie Mae] products are in line with other market participants.” LoanDepot plans to resume those conversations with Ginnie Mae.

Also, Ginnie Mae has removed the restriction that limited Freedom Mortgage Corp. to Ginnie Mae II custom pools for Veterans Affairs single family guaranteed loans as of March 1, 2019. It is again eligible to use the Ginnie Mae I and Ginnie Mae II multi-issuer securities programs for these loans. The removal of such a restriction occurs when the issuer demonstrates that the prepayment speeds are in-line with other lenders, and the improved performance is sustainable.