Download:
pdf |
pdfGINNIE MAE MULTICLASS SECURITIES PROGRAM
Government National Mortgage Association
MULTICLASS SECURITIES GUIDE
Part VII: Ginnie Mae HREMIC Transactions:
HREMIC Transaction Documents
July 1, 2023
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION
MULTICLASS SECURITIES GUIDE
(July 1, 2023 Edition)
Page
PART I: GINNIE MAE MULTICLASS SECURITIES TRANSACTIONS:
GUIDELINES AND SELECTED TRANSACTION DOCUMENTS
A.
INTRODUCTION TO THE GINNIE MAE MULTICLASS SECURITIES PROGRAM .......................... I-1
B.
TRANSACTION GUIDELINES FOR THE GINNIE MAE MULTICLASS SECURITIES PROGRAM
C.
1.
General Overview .......................................................................................................................... I-2
2.
Transaction Information Web-Based Application - e-Access........................................................
I-3
e-Access
3.
Ginnie Mae Multiclass Securities Program Conventions...............................................................
I-4
Conventions
4.
Ginnie Mae Multiclass Securities Transaction Participants...........................................................
I-5
Participants
5.
Trust Counsel’s Responsibilities....................................................................................................
Responsibilities
I-6
6.
Post-Closing Matters with respect to Ginnie Mae Multiclass Securities Transactions .................. I-7
GINNIE MAE REMIC AND MX TRANSACTION DOCUMENTS
1.
[Reserved] ...................................................................................................................................... I-8
2.
Sponsor Agreement for REMIC and MX Transactions
a.
Form of Sponsor Agreement for REMIC and MX Transactions ..................................... I-9
b.
Standard Sponsor Provisions for REMIC and MX Transactions (including Supplemental
Statement) ...................................................................................................................... I-10
3.
Base Offering Circular for Single Family REMIC and MX Transactions ................................... I-11
4.
Form of Offering Circular Supplement for Single Family REMIC and MX Transactions .......... I-12
5.
Form of Transfer Affidavit for REMIC Transactions .................................................................. I-13
6.
Form of Guaranty Agreement for Single Family REMIC and MX Transactions ........................ I-14
7.
Accountants’ Agreed-Upon Procedures Reports for Single Family REMIC and MX
Transactions
a.
Form of Accountants’ Agreed-Upon Procedures Report for Single Family REMIC and
MX transactions concerning the Offering Circular........................................................ I-15
(i)
b.
8.
E.
Accountants’ Agreed-Upon Procedures Report for Single Family REMIC and MX
Transactions as of Closing Date .................................................................................... I-16
Transactions................ I-17
Form of Closing Flow of Funds Instruction Letter for REMIC and MX Transactions
GLOSSARY
GLOSSARY............................................................................................................................................... I-18
PART II: GINNIE MAE MULTICLASS SECURITIES TRANSACTIONS:
ADDITIONAL SELECTED TRANSACTION DOCUMENTS
A.
INTRODUCTION.......................................................................................................................................II-1
INTRODUCTION
II-1
B.
II-2
CLOSING CHECKLIST AND TABLE OF CONTENTS FOR REMIC TRANSACTIONS ....................II-2
C.
TRUST AGREEMENTS FOR REMIC TRANSACTIONS
D.
E.
F.
1.
Form of Trust Agreement for REMIC Trusts (including Form of Waiver Agreement)
Agreement)................II-3
II-3
2.
REMIC Standard Trust Provisions................................................................................................II-4
Provisions
II-4
3.
Form of MX Trust Agreement ......................................................................................................II-5
II-5
4.
Provisions
II-6
MX Standard Trust Provisions......................................................................................................II-6
TRANSFER OF GINNIE MAE CERTIFICATES AND CREATION OF REMIC SECURITIES
1.
Forms of Trustee’s Receipt and Safekeeping Agreement for REMIC Transactions.....................II-7
Transactions
II-7
2.
Form of Issuance Statement for REMIC and MX Transactions ...................................................II-8
II-8
LEGAL OPINIONS for REMIC and MX Transactions
1.
Form of Transaction Opinion of Trust Counsel for REMIC and MX Transactions......................II-9
Transactions
II-9
2.
Form of Opinion of Sponsor for REMIC and MX Transactions.................................................II-10
Transactions
II-10
3.
Form of Tax Opinions of Trust Counsel for REMIC and MX Transactions
a.
Single REMIC ..............................................................................................................II-11
II-11
b.
Double REMIC: One Residual Security .......................................................................II-12
II-12
c.
Double REMIC: Two Residual Securities ....................................................................II-13
II-13
d.
II-14
MX (Grantor) Trust ......................................................................................................II-14
4.
Form of Opinion of Trustee’s Counsel for REMIC and MX Transactions.................................II-15
Transactions
II-15
5.
Opinion of HUD General Counsel ..............................................................................................II-16
II-16
GINNIE MAE REMIC TRUST ADMINISTRATION AND TAX REPORTING...................................II-17
REPORTING
II-17
(ii)
PART III: GINNIE MAE PLATINUM SECURITIES TRANSACTIONS
PART IV: GINNIE MAE MULTIFAMILY TRANSACTIONS:
MULTIFAMILY TRANSACTION DOCUMENTS*
A.
GENERAL OVERVIEW: MULTIFAMILY TRANSACTIONS ............................................................. IV-1
B.
DOCUMENTS........................................................ IV-2
GINNIE MAE MULTIFAMILY TRANSACTION DOCUMENTS
1.
Transactions........................................ IV-3
Form of Offering Circular Supplement for Multifamily Transactions
2.
Multifamily Base Offering Circular
Circular............................................................................................ IV-4
3.
Form of Guaranty Agreement for Multifamily Transactions ...................................................... IV-5
4.
Accountants’ Agreed-Upon Procedures Reports for Multifamily Transactions
a.
Form of Accountants’ Agreed-Upon Procedures Report concerning the Offering Circular
for Multifamily Transactions ........................................................................................ IV-6
b.
Agreed-Upon Procedures Report as of Closing Date for Multifamily Transactions .... IV-7
* For multifamily transactions, additional transaction documents found in Parts I and II of the Multiclass
Securities Guide must be delivered, including the Sponsor Agreement, Transfer Affidavit, Closing Flow of Funds
Instruction Letter, Supplemental Statement, if applicable, REMIC Trust Agreement, MX Trust Agreement, if
applicable, Trustee’s Receipt and Safekeeping Agreement and the Issuance Statement. In addition, opinions of
counsel found in Part II of the Multiclass Securities Guide must be delivered, including the Transaction Opinion,
Sponsor Opinion, relevant Tax Opinions, Trustee’s Opinion and Opinion of HUD General Counsel.
PART V: GINNIE MAE MULTICLASS SECURITIES TRANSACTIONS:
CALLABLE SECURITIES
A.
GENERAL OVERVIEW: CALLABLE TRANSACTIONS .....................................................................V-1
V-1
B.
GINNIE MAE CALLABLE TRANSACTION DOCUMENTS
1.
Form of Offering Circular for Callable Securities ........................................................................V-2
V-2
2.
Form of Trust Agreement for Callable Trusts
Trusts...............................................................................V-3
V-3
3.
Standard Trust Provisions for Callable Trusts ..............................................................................V-4
V-4
4.
Form of Sponsor Agreement for Callable Trusts ..........................................................................V-5
V-5
5.
Standard Sponsor Provisions for Callable Trusts
Trusts..........................................................................V-6
V-6
6.
Form of Ginnie Mae Callable Securities Guaranty Agreement ....................................................V-7
V-7
7.
[Reserved] .....................................................................................................................................V-8
V-8
8.
Form of Accountant’s Agreed-Upon Procedures Report Concerning the Offering Circular
for Callable Securities
Securities...................................................................................................................V-9
V-9
(iii)
9.
Forms of Trustee’s Receipt and Safekeeping Agreement for Callable Securities
Securities.......................V-10
V-10
10.
Form of Issuance Statement for Callable Securities ...................................................................V-11
V-11
11.
Securities......................................V-12
Form of Transaction Opinion of Trust Counsel for Callable Securities
V-12
12.
Form of Tax Opinion of Trust Counsel for Callable Securities ..................................................V-13
V-13
13.
Form of Opinion of Sponsor for Callable Securities
Securities...................................................................V-14
V-14
14.
Form of Opinion of Trustee’s Counsel for Callable Securities ...................................................V-15
V-15
15.
Form of Accountants’ Agreed-Upon Procedures Report as of the Closing Date for
Callable Securities
Securities.......................................................................................................................V-16
V-16
16.
Form of Closing Flow of Funds Instruction Letter for Callable Securities
Securities.................................V-17
V-17
17.
Securities..................................V-18
Form of Closing Checklist and Table of Contents for Callable Securities
V-18
PART VI: GINNIE MAE MULTICLASS SECURITIES TRANSACTIONS:
STRIPPED MORTGAGE-BACKED SECURITIES (“SMBS”)
A.
GENERAL OVERVIEW: SMBS TRANSACTIONS ............................................................................. VI-1
B.
GINNIE MAE SMBS TRANSACTION DOCUMENTS
1.
[Reserved] ................................................................................................................................... VI-2
2.
Standard Sponsor Provisions for SMBS Transactions ................................................................ VI-3
3.
Form of Sponsor Agreement for SMBS Transactions ................................................................ VI-4
4.
Base Offering Circular for SMBS Transactions..........................................................................
VI-5
Transactions
5.
Form of Offering Circular Supplement for SMBS Transactions ................................................ VI-6
6.
Form of Accountants’ Agreed-Upon Procedures Report concerning the Offering Circular
Transactions
for SMBS Transactions............................................................................................................................
VI-7
7.
Form of Guaranty Agreement for SMBS Transactions
Transactions............................................................... VI-8
8.
Form of Issuance Statement for SMBS Transactions ................................................................. VI-9
9.
Forms of Trustee’s Receipt and Safekeeping Agreement for SMBS Transactions...................
VI-10
Transactions
10.
Form of Closing Flow of Funds Letter for SMBS Transactions ............................................... VI-11
11.
Form of Trust Agreement for SMBS Transactions ................................................................... VI-12
12.
Standard Trust Provisions for Ginnie Mae SMBS Trusts ......................................................... VI-13
13.
Form of Transaction Opinion of Trust Counsel for SMBS Transactions
Transactions.................................. VI-14
14.
Form of Opinion of Sponsor for SMBS Transactions
Transactions............................................................... VI-15
(iv)
15.
Form of Tax Opinion of Trust Counsel for SMBS Transactions .............................................. VI-16
16.
Form of Opinion of Trustee’s Counsel for SMBS Transactions ............................................... VI-17
17.
Form of Accountants’ Agreed-Upon Procedures Report as of Closing Date for SMBS
Transactions .............................................................................................................................. VI-18
PART VII: GINNIE MAE HREMIC TRANSACTIONS:
HREMIC TRANSACTION DOCUMENTS
A.
GENERAL OVERVIEW: HREMIC TRANSACTIONS ....................................................................... VII-1
B.
GINNIE MAE HREMIC TRANSACTION DOCUMENTS
1.
Form of Offering Circular Supplement for HREMIC Transactions
Transactions........................................... VII-2
2.
Accountants’ Agreed-Upon Procedures Reports for HREMIC Transactions
a.
Form of Accountants’ Agreed-Upon Procedures Report concerning the Offering Circular
for HREMIC Transactions
Transactions........................................................................................... VII-3
b.
Agreed-Upon Procedures Report as of Closing Date for HREMIC Transactions ....... VII-4
* For HREMIC transactions, additional transaction documents found in Parts I and II of the Multiclass
Securities Guide must be delivered, including the Sponsor Agreement, Transfer Affidavit, Closing Flow of Funds
Instruction Letter, Supplemental Statement, if applicable, REMIC Trust Agreement, MX Trust Agreement, if
applicable, Trustee’s Receipt and Safekeeping Agreement and the Issuance Statement. In addition, opinions of
counsel found in Part II of the Multiclass Securities Guide must be delivered, including the Transaction Opinion,
Sponsor Opinion, relevant Tax Opinions, Trustee’s Opinion and Opinion of HUD General Counsel.
(v)
GENERAL OVERVIEW: HREMIC TRANSACTIONS
INTRODUCTORY STATEMENT
Ginnie Mae provides for the guarantee of REMIC (and MX) Securities backed by HECM
MBS (“HREMICs”) under the Ginnie Mae Multiclass Securities Program. HECM MBS are
Ginnie Mae II MBS that are backed by participation interests in advances made to borrowers and
related amounts in respect of home equity conversion mortgages (or HECMs).
The requirements of the Ginnie Mae Multiclass Securities Program are set forth in the
Ginnie Mae Multiclass Securities Guide (the “Guide”), which consists of seven parts. Refer to
Part I of the Guide for an introduction to, and transaction guidelines for, the Ginnie Mae
Multiclass Securities Program generally. This Part VII of the Guide relates to the issuance of a
Ginnie Mae HREMIC Security and provides for modifications of the transaction guidelines for
such issuance. Capitalized terms that are used but not defined herein have the meanings ascribed
thereto in the Glossary contained in Part I of the Guide.
GINNIE MAE HREMIC TRANSACTION DOCUMENTS
Part I of the Guide contains under Heading C., entitled GINNIE MAE REMIC AND MX
TRANSACTION DOCUMENTS, a selection of the forms of documents specifically for use in
Ginnie Mae REMIC and MX transactions. Part I of the Guide includes the Glossary, Standard
Sponsor Provisions and the forms of Sponsor Agreement, Transfer Affidavit and Closing Flow
of Funds Letter for REMIC transactions. The forms for the remainder of the documents required
to complete single family Ginnie Mae REMIC and MX transactions are included in Part II of the
Guide, and most of those forms will be applicable to Ginnie Mae HREMIC transactions. Part II
of the Guide includes the REMIC Standard Trust Provisions, MX Standard Trust Provisions and
the forms of Closing Checklist, REMIC Trust Agreement, MX Trust Agreement, Trustee’s
Receipt and Safekeeping Agreement, Issuance Statement, Transaction Opinion, Sponsor’s
Opinion, Tax Opinions, and Trustee’s Counsel’s Opinion for REMIC transactions. These
documents apply to all REMIC transactions, regardless of whether the transaction is a single
family or HREMIC transaction. Unless otherwise explicitly specified to the contrary, the
documentation and fees for a single family REMIC transaction will apply to all HREMIC
transactions.
For issuances of HREMIC Securities, the related transaction parties are required to use
the forms of documents specifically related to HREMIC transactions contained in this Part VII in
lieu of the forms specified in Part I or Part II of the Guide. Any changes to any transaction
documents will require prior approval by Ginnie Mae and Ginnie Mae’s Legal Advisor for the
HREMIC transaction.
This Part VII also provides information regarding important Ginnie Mae policy regarding
HREMIC Trusts.
GINNIE MAE POLICIES REGARDING HREMIC SECURITIES
In connection with offerings of Ginnie Mae HREMIC Securities, Ginnie Mae has determined
that:
VII-1-1
•
Each HREMIC Security issued will be deemed an Increased Minimum
Denomination Class and, thus, will be required to be issued in a minimum
denomination that results in a minimum purchase price of $100,000.
•
Given the unique properties of HECMs, Ginnie Mae must approve all novel
HREMIC structures at least one month prior to the deal cycle in which the
Sponsor intends to use the novel structure. Ginnie Mae has approved the specific
structures of HREMIC Securities detailed in the form of HREMIC Offering
Circular Supplement included in this Part VII. As Ginnie Mae approves
additional deal structures, the HREMIC Offering Circular Supplement template
may not be updated to reflect those structures. It is the responsibility of the
Sponsor to ensure that all HREMIC deal structures have been approved by Ginnie
Mae prior to the Final Structure Date in the month the Sponsor intends to use the
deal structure.
VII-1-2
FORM OF OFFERING CIRCULAR SUPPLEMENT
FOR HREMIC TRANSACTIONS
VII-2-0
[As of July 1, 2023]
Offering Circular Supplement
(To Base Offering Circular dated [__], 20[__])
$[
][(1)]
Government National Mortgage Association
GINNIE MAE®
Guaranteed HECM MBS REMIC Pass-Through Securities
[and MX Securities]
Ginnie Mae REMIC Trust 20[__]-H[__]
The Securities
The Trust will issue the Classes
of Securities listed on the front
cover of this offering circular
supplement.
The Ginnie Mae
Guaranty
Ginnie Mae will guarantee the
timely payment of principal and
interest on the securities. The
Ginnie Mae Guaranty is backed
by the full faith and credit of the
United States of America.
The Trust and its Assets
The Trust will own [(1)] Ginnie
Mae HECM MBS [or Ginnie
Mae Platinum Certificate
backed by HECM MBS] [and
(2) [a] certain previously issued
certificate[s] .
Class of
Original
Principal
REMIC
Securities
Balance(3)
[Security Group 1]
HA................….. $
HB................…..
HI................…..
[Security Group 2]
JA......................
JI(2)...........…..
KA...............…..
KI(2).........…..
[Security Group 3]
FT......................
TI.....................
Interest
Rate
Interest
Type(4)
[ ]%
(6)
(6)
HSEQ
HSEQ
NTL(HPT)
FIX/HZ
HWAC/HZ/[DLY]
HWAC/IO/[DLY]
[Backed by
FIX HMBS]
[ ]%
(6)
[ ]%
(6)
HPT
NTL(HPT)
HPT
NTL(HPT)
FIX/HZ
HWAC/IO/[DLY]
FIX/HZ
HWAC/IO/[DLY]
[Backed by FIX
HMBS]
(6)
HPT
FLT/HWAC/HZ
(6)
NTL(HPT)
HWAC/IO/[DLY]
[Security Group 4]
PT......................
[Security Group 5]
AI......................
FA......................
FI......................
[Security Group 6]
BI......................
FB......................
FC......................
[Security Group 7]
FG......................
GI......................
[Security Group 8]
GA......................
GZ......................
IB(7)..................
BA......................
Residual[s]
RR[1]....................
[RR2]....................
[RR3]....................
[RR4]....................
[RR5]....................
[RR6]....................
[RR7]....................
[RR8]....................
[Backed by 1-month
Adjusted CME Term
SOFR
HMBS]
[Backed by
1- year
Adjusted CME
Term SOFR
HMBS]
(6)
HPT
HWAC/HZ/[DLY]
(6)
(6)
(6)
NTL(HPT)
HPT
NTL (HPT)
HWAC/IO/[DLY]
FLT/HWAC/HZ
HWAC/IO/[DLY]
[Backed by FIX
HMBS]
(6)
(6)
(6)
NTL (HPT)
HPT
HPT
HWAC/IO/DLY
FLT/HWAC/HZ
FLT/HWAC/HZ
[Backed by 1-year
HMBS]
(6)
(6)
HPT
NTL (HPT)
FLT/HWAC/HZ
HWAC/IO/DLY
[Backed by 1-year
HMBS]
[ ]%
(6)
(6)
[ ]%
0
0
0
0
0
0
0
0
CUSIP
Number
Final
Distribution
Date(5)
Principal
Type(4)
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
SC/HSEQ
FIX/HZ
SC/HSEQ
HWAC/HZ/DLY
NTL(SC/HSEQ) HWAC/IO/DLY
SC/HSEQ
FIX/HZ
NPR
NPR
NPR
NPR
NPR
NPR
NPR
NPR
[Backed by
Underlying
Certificate(s)]
NPR
NPR
NPR
NPR
NPR
NPR
NPR
NPR
(1) [NOTE TO TRUST COUNSEL: For certain IO Classes backed by underlying certificates: This amount includes the
Class [IB] Deferred Interest Amount as of the Closing Date.]
(2) [These Securities may be exchanged for MX Securities described in Schedule I to this Supplement.]
(3) Subject to increase as described under "Increase in Size" in this Supplement. The amount shown for [each] [the] Notional
Class (indicated by "NTL" under Principal Type) is its original Class Notional Balance and does not represent principal that
will be paid.
(4) As defined under "Class Types" in Appendix I to the Base Offering Circular. [The Class Notional Balance of [each] [the]
Notional Class will be either reduced or increased, as applicable, as shown under "Terms Sheet — Notional Class[es]" in
this Supplement.
(5) See "Yield, Maturity and Prepayment Considerations — Final Distribution Date" in this Supplement.
(6) See "Terms Sheet — Interest Rates" in this Supplement.
(7) NOTE TO TRUST COUNSEL: For IO Classes backed by underlying certificates:
Class [IB] is entitled to receive the Class [IB] Deferred Interest Amount, which amount equals $[__] as of the Closing
Date [and which amount is not included in the balance set forth in the table above].]
VII-2-1
The securities may not be suitable investments for you. You should consider carefully the risks of
investing in them.
See "Risk Factors" beginning on page S-[__] which highlights some of these risks.
The Sponsor and the Co-Sponsor[s] will offer the securities from time to time in negotiated transactions
[____ ], 20[__].
at varying prices. We expect the closing date to be [______],
You should read the Base Offering Circular as well as this Supplement.
The securities are exempt from registration under the Securities Act of 1933 and are "exempted
securities" under the Securities Exchange Act of 1934.
[SPONSOR]
The date of this Offering Circular Supplement is [
S-2
[CO-SPONSOR]
], 20[ ].
VII-2-2
AVAILABLE INFORMATION
You should purchase the securities only if you have read and understood the following
documents:
•
this Offering Circular Supplement (this "Supplement"),
•
the Base Offering Circular,
•
the HECM MBS Base Prospectus dated [October 1, 2007][,] [July 1, 2011] [,] [or]
[November 1, 2013] [or] [June 1, 2014][,] [or] [July 1, 2023][,] [as applicable] (the
"HECM MBS Base Prospectus")[.][,] [and]
•
each HECM MBS Prospectus Supplement relating to the HECM MBS (the "HECM
MBS Prospectus Supplements," together with the HECM MBS Base Prospectus, the
"HECM MBS Disclosure Documents")[.][,] [and]
•
[the Platinum Certificates Base Offering Circular, dated [July 1, 2023] (the “Platinum
Base Offering Circular”),]
•
[each Platinum Certificate Offering Circular Supplement relating to the Ginnie Mae
Platinum Certificates backed by HECM MBS (the “Platinum Certificate Offering
Circular Supplements,” together with the Platinum Base Offering Circular, the
“Platinum Disclosure Documents”)][.] [and]
•
[in the case of the Group [8] Securities, the disclosure document[s] relating to the
Underlying Certificate[s] (the "Underlying Certificate Disclosure Document[s]").]
The Base Offering Circular[,] [and] the HECM MBS Disclosure Documents[,] [and] [the
Platinum Disclosure Documents] [and the Underlying Certificate Disclosure Document[s]] are
available on Ginnie Mae's website located at http://www.ginniemae.gov ("ginniemae.gov").
If you do not have access to the internet, call BNY Mellon, which will act as information
agent for the Trust, at (800) 234-GNMA, to order copies of the Base Offering Circular. In addition,
you can obtain copies of any other document listed above by contacting BNY Mellon at the
telephone number listed above.
Unless otherwise specifically defined herein, please consult the standard abbreviations of
Class Types included in the Base Offering Circular as Appendix I and the glossary included in the
Base Offering Circular as Appendix II for definitions of capitalized terms.
TABLE OF CONTENTS
Page
Page
Terms Sheet .................................................5
Ginnie Mae Guaranty .................................30
Risk Factors ...............................................17
Description of the Securities ......................30
The Trust Assets ........................................27
S-3
VII-2-3
Yield, Maturity and Prepayment
Considerations......................................38
Considerations
38
Certain United States Federal Income Tax
Consequences.......................................51
Consequences
51
ERISA Matters
Matters...........................................53
53
Legal Investment Considerations
Considerations...............54
54
Plan of Distribution
Distribution....................................54
54
Increase in Size ..........................................54
54
Legal Matters .............................................55
55
[Schedule I: Available Combination[s]
Combination[s]S-I-1]
S-I-1]
Exhibit A: Assumed Characteristics of the
HECMs and the Participations
Underlying the [Group 1 through 7]
Trust Assets.......................................
Assets
A-1
Exhibit B: CPR Percentage in Effect by
HECM Age ........................................B-1
B-1
[Exhibit C: Draw Curve in Effect by HECM
Age...................................................
C-1]
Age
[Exhibit D: Underlying Certificate[s] .... D-1]
[Exhibit E: Updated Exhibit A
A............... E-1]
S-4
VII-2-4
TERMS SHEET
This terms sheet contains selected information for quick reference only. You should read
this Supplement, particularly "Risk Factors," and each of the other documents listed under
"Available Information."
Sponsor: [
]
Co-Sponsor: [
Trustee: [
]
]
Tax Administrator: The Trustee
Closing Date: [
], 20[ ]
Distribution Date: The 20th day of each month or, if the 20th day is not a Business Day, the first
Business Day thereafter, commencing in [
] 20[ ].
Trust Assets:
Trust Asset
Group
[or Subgroup](1)
1
2[A]
2[B]
3
4
5
6
7
8
Trust Asset Type(2)
Ginnie Mae II
Ginnie Mae II
Ginnie Mae II
Ginnie Mae II
Ginnie Mae II
Ginnie Mae II
Ginnie Mae II
Ginnie Mae II
Underlying
Certificate[s]
HECM MBS
Principal Balance
$
HECM MBS Rate(3)
(5)
(6)
(6)
(7)
(8)
[Interest Rate[s]] [or]
[Approximate
Original Term
Weighted Average
to Maturity
Margin[s] of
(in years)
Participations](4)
50
50
50
50
50
50
50
50
(8)
(8)
[(1) [The [Group 2] Trust Assets consist of the enumerated subgroups (each, a "Subgroup").] NOTE TO TRUST COUNSEL: Omit this column
if the transaction is structured as a single group.]
(2)
The [Group 1 through 7] Trust Assets are HECM MBS [(or, in the case of Pool[s] [ ][,] [and] [ ], Ginnie Mae Platinum Certificates backed
by HECM MBS)] backed by participation interests (each, a "Participation") in advances made to borrowers and related amounts in respect of
home equity conversion mortgage loans ("HECMs") insured by FHA. See "The Trust Assets — The Participations and the HECMs" in this
Supplement. Certain additional information regarding the HECM MBS [and Ginnie Mae Platinum Certificates], including related pool
numbers, is set forth in Exhibit A to this Supplement.
(3)
The HECM MBS Rate for each [Group 1 through 7] Trust Asset is the weighted average coupon of its related Participation interest rates
("WACR"). WACR constitutes the Weighted Average Coupon Rate for purposes of this Supplement. See "The Trust Assets — The Trust
MBS" in this Supplement.
[(4) [NOTE TO TRUST COUNSEL: FOR FIXED RATE HECM MBS BACKED GROUPS: For Group[s] [ ] [and [ ]], reflects the [range
of] interest rate[s] of the Participations (net of the related Servicing Fee Margin) underlying the related HECM MBS pool[s] at issuance.
NOTE TO TRUST COUNSEL: FOR ARM HECM MBS BACKED GROUPS: For Group[s] [ ] [and [ ]], reflects the [range of]
approximate weighted average margin[s] on the Participations (net of the related Servicing Fee Margin) underlying the related HECM MBS
pool[s].]
[(5) [NOTE TO TRUST COUNSEL: FOR ARM HECM MBS BACKED GROUPS THAT ADJUST BASED ON ONE-MONTH
ADJUSTED CME TERM SOFR: The applicable index for each of the [Group [3]] [and Group [ ]] Trust Assets is one-month Adjusted
S-5
VII-2-5
CME Term SOFR ("One-Month Adjusted CME Term SOFR") 1. The actual HECM lifetime caps on interest rate adjustments may limit
whether the HECM MBS Rate for a particular [Group [3]] [or Group [ ]] Trust Asset remains at One-Month Adjusted CME Term SOFR (as
determined pursuant to the HECM loan documents) plus the applicable margin. See "The Trust Assets — The Trust MBS" and "Risk Factors—
Adjustable rate HECMs are subject to limitations on interest rate adjustments, which may limit the amount of interest payable in respect of
the related HECM MBS and may limit the WACR on the related HECM MBS and the interest rates on the group [ ] [and [ ]] securities" in
this Supplement.]
[(6) [NOTE TO TRUST COUNSEL: FOR ARM HECM MBS BACKED GROUPS THAT ADJUST BASED ON ONE-YEAR ADJUSTED
CME TERM SOFR: The applicable index for each of the [Group [4]] [and Group [6]] Trust Assets is twelve-month Adjusted CME Term
SOFR ("One-Year Adjusted CME Term SOFR") 2. The actual HECM lifetime and annual caps on interest rate adjustments may limit whether
the HECM MBS Rate for a particular [Group [4]] [or [ ]] Trust Asset remains at One-Year Adjusted CME Term SOFR (as determined
pursuant to the HECM loan documents) plus the applicable margin. See "The Trust Assets — The Trust MBS" and "Risk Factors—Adjustable
rate HECMs are subject to limitations on interest rate adjustments, which may limit the amount of interest payable in respect of the related
HECM MBS and may limit the WACR on the related HECM MBS and the interest rates on the group [ ] [and [ ]] securities" in this
Supplement.]
[(7)[NOTE TO TRUST COUNSEL: FOR ARM HECM MBS BACKED GROUPS THAT ADJUST BASED ON ONE-YEAR CMT: The
applicable index for each of the [Group [7]] [and Group [ ]] Trust Assets is one-year CMT ("One-Year CMT") 3. The actual HECM lifetime
[and, with respect to Pool[s] [ ][,] [and] [ ][,] [and] [ ] included in the Group [ ] [and [ ]] Trust Assets, annual] caps on interest rate adjustments
may limit whether the HECM MBS Rate for a particular [Group [7]] [or Group [ ]] Trust Asset remains at One-Year CMT (as determined
pursuant to the HECM loan documents) plus the applicable margin. See "The Trust Assets — The Trust MBS" and "Risk Factors—Adjustable
rate HECMs are subject to limitations on interest rate adjustments, which may limit the amount of interest payable in respect of the related
HECM MBS and may limit the WACR on the related HECM MBS and the interest rates on the group [ ] [and [ ]] securities" in this
Supplement.]
[(8) Certain information regarding the Underlying Certificate[s] is set forth in Exhibits [D and E] to this Supplement.]
[NOTE TO TRUST COUNSEL: In the event there are one or more Trust Asset subgroups in a
deal, references to groups throughout this supplement may need to be modified to refer to
subgroups.]
[Security Groups: This series of Securities consists of multiple Security Groups (each, a
"Group"), as shown on the front cover of this Supplement [and on Schedule I to this Supplement].
[Except in the case of [the MX Class[es] [Class[es] [ ] [and] [ ]] [P][p]ayments on each Group
will be based solely on payments on the Trust Asset Group [or Subgroup] with the same numerical
designation.]
Assumed Characteristics of the HECMs and the Participations Underlying the [Group 1
through 7] Trust Assets: The assumed characteristics of the HECMs and the Participations
underlying the [Group 1 through 7] Trust Assets are identified in Exhibit A to this Supplement.
The assumed characteristics may differ, perhaps significantly, from the characteristics of the
HECMs and the related Participations as of the date of issuance of the related HECM MBS [or
Ginnie Mae Platinum Certificate], which characteristics are identified in the related HECM MBS
Prospectus Supplement [or the related Platinum Certificate Offering Circular Supplement, as
applicable]. There can be no assurance that the actual characteristics of the HECMs and the
1
NOTE TO TRUST COUNSEL: If the only Adjusted CME Term SOFR rate used in the OCS is One-Month
Adjusted CME Term SOFR, you may choose to define One-Month Adjusted CME Term SOFR as “Adjusted
CME Term SOFR”.
2
NOTE TO TRUST COUNSEL: If the only Adjusted CME Term SOFR rate used in the OCS is One-Year Adjusted
CME Term SOFR, you may choose to define One-Year Adjusted CME Term SOFR as “Adjusted CME Term
SOFR”.
3
NOTE TO TRUST COUNSEL: If the only CMT rate used in the OCS is One-Year CMT, you may choose to
define One-Year CMT as “CMT”.
S-6
VII-2-6
Participations underlying the [Group 1 through 7] Trust Assets will be the same as the assumed
characteristics identified in Exhibit A to this Supplement.
[Assumed Characteristics of the HECMs and the Participations Underlying the Group [8]
Underlying Certificate[s]. The assumed characteristics of the HECMS and the Participations
underlying the Underlying Certificate[s] are identified in the respective updated Exhibit A for the
Underlying Certificate[s] (the "Updated Exhibit[s] A") in Exhibit [E] to this Supplement. The
assumed characteristics may differ, perhaps significantly, from the characteristics of the HECMs
and the related Participations as of the date of issuance of the related HECM MBS, which
characteristics are identified in the related HECM MBS Prospectus Supplement. There can be no
assurance that the actual characteristics of the HECMs and the Participations underlying the
Underlying Certificate[s] will be the same as the assumed characteristics identified in the Updated
Exhibit[s] A in Exhibit [E] to this Supplement.]
Issuance of Securities: The Securities, other than the Residual Securities, will initially be issued
in book-entry form through the book-entry system of the U.S. Federal Reserve Banks (the
"Fedwire Book-Entry System"). The Residual Securities will be issued in fully registered,
certificated form. See "Description of the Securities — Form of Securities" in this Supplement.
[Modification and Exchange: If you own exchangeable Securities you will be able, upon notice
and payment of an exchange fee, to exchange them for a proportionate interest in the related
Securities shown on Schedule I to this Supplement. [Under certain circumstances, Class [ ] will
be subject to mandatory exchange, with no exchange fee, for its related REMIC Securities.] See
"Description of the Securities — Modification and Exchange" in this Supplement.]
Increased Minimum Denomination Classes: Each Regular [and MX] Class. See "Description
of the Securities — Form of Securities" in this Supplement.
Interest Rates: [The Interest Rate[s] for the Fixed Rate Class[es] [is][are] shown on the front
cover of this Supplement [and on Schedule I to this Supplement].]
[[Each of Classes [ ] and [ ]] [The Floating Rate Class[es]] will bear interest at [a] per annum
rate[s] based on [One-Month CME Term SOFR] [(hereinafter referred to as "[One-Month CME
Term SOFR")]] 4[,] [a 30-day compounded average of the Secured Overnight Financing Rate
("SOFR") (hereinafter referred to as "30-day Average SOFR")][,] [or] [twelve-month CME Term
SOFR ("One-Year CME Term SOFR")]4 [or] [one-year CMT [(hereinafter referred to as "[OneYear CMT")]] as follows: 5
4
NOTE TO TRUST COUNSEL: CME Term SOFR is permitted only for security groups wholly backed by Trust
Assets or Underlying Certificates that bear interest based on Adjusted CME Term SOFR.
5
NOTE TO TRUST COUNSEL: Organize Classes by Security Group.
S-7
VII-2-7
Class
Security
Group 1
Class [ ]
Class [ ]
Interest Rate
Formula(1)
Initial
Interest
Rate(2)
Minimum
Rate(3)[(6)]
Maximum
Rate(4)
[ ] + [ ]%
%
%
[(5)][%]
[(6)]
Security
Group 2
Class [ ]
Delay(in days)
[One-Month
CME Term
SOFR] [or][,]
[30-day
Average
SOFR] [or][,]
[One-Year
CME Term
SOFR
[or]
[One-Year
CMT]
for Minimum
Interest Rate
%
(1)
[One-Month CME Term SOFR][,] [30-day Average SOFR][,] [and] [One-Year CME Term SOFR] [and] [One-Year CMT] will be established
as described under "Description of the Securities — Interest Distributions — Floating Rate Class[es]" in this Supplement.
(2)
The initial Interest Rate will be in effect during the first Accrual Period; the Interest Rate [for [each][the] Floating Rate Class [other than
Classes [ ] and [ ]] will adjust monthly thereafter. [The Interest Rate for [each of] Class[es] [ ] [and [ ]] will adjust annually, beginning
with the Accrual Period related to the Distribution Date in [NOTE TO TRUST COUNSEL: INSERT MONTH AND YEAR OF
DISTRIBUTION DATE RELATED TO THE FIRST INTEREST RATE RESET].
(3)
[Except as otherwise indicated in this table,] [The] [the] minimum rate for any Accrual Period will be the lesser of (i) the rate indicated in this
table under the heading "Minimum Rate" and (ii) the WACR for the [related] Trust Asset[s] [Group[s]][Subgroup[s]] [(or for [each of] Group
[ ][,] [and] [ ][,] [and] [ ], the weighted average of the interest rates of the Underlying [Certificate or] Certificates, [as applicable, included in
such Trust Asset Group,] weighted based on the outstanding principal balance of each Underlying Certificate for the related Distribution Date
(before giving effect to any payments on such Distribution Date) (“Underlying Certificate WACR”))].
(4)
[Except as otherwise indicated in this table,] [The] [the] maximum rate for any Accrual Period will be [the lesser of (i) the rate indicated in
this table under the heading "Maximum Rate" and (ii)] the WACR [or Underlying Certificate WACR] for the [related] Trust Asset[s]
[Group[s]][Subgroup[s]]. See "Risk Factors — The maximum rate on [the] [each] floating rate class could limit the amount of interest that
accrues on such class" in this Supplement.
[(5) NOTE TO TRUST COUNSEL: For Floating Rate Classes collateralized by Fixed Rate Trust Assets: The maximum rate for Class [FA] for
any Accrual Period will be the WACR for Trust Asset Group [5].]
[(6) NOTE TO TRUST COUNSEL: For MX Classes that are FLT/HWAC/HZ: The minimum rate and the maximum rate for [each of]
Class[es] [INSERT MX FLT/HWAC/HZ CLASS(ES)] for any Accrual Period will be limited by the aggregate interest accrued on its
related REMIC Classes for that Accrual Period.]
[[Each of] [t]he Floating Rate Class[es] will bear interest during each Accrual Period [following
the first Accrual Period] at a per annum rate equal to the lesser of the [related] maximum rate and
the result based on the [related] interest rate formula described above.]
The approximate initial Interest Rates for the Interest Only Classes [and Class [INSERT
HWAC/HZ/DLY CLASSES]] are set forth in the table below.
S-8
VII-2-8
Class 6
Approximate Initial Interest Rate(1)
Security Group [1]
[ ] .................................................................................................................
[ ]%
[ ] (2)..............................................................................................................
[ ]%
Security Group [2]
[ ] .................................................................................................................
[ ]%
[ ] .................................................................................................................
[ ]%
(1)
The approximate initial Interest Rates for the [Class[es] set forth in the table above] [Interest Only Classes] [(other than Class [IB])] were
calculated using the assumed characteristics of the HECMs and the Participations underlying the [related] Trust Assets set forth in Exhibit A,
which are provided by the Sponsor as of [ ], 20[ ]. [The approximate initial interest rate for Class [IB] was calculated using the assumed
characteristics of the HECMs and the Participations underlying the Group [8] Trust Asset[s] set forth in Exhibit [E], which are provided by
the Sponsor as of [ ], 20[ ].] The assumed characteristics include rounded weighted average gross interest rates on the HECMs related to the
Participations backing the Trust Assets. The actual initial Interest Rate[s] for such Class[es] will be calculated based on the interest that
accrues on each HECM, aggregated and then rounded to a different level of precision. Therefore the actual initial Interest Rates for such
Class[es] may differ from the approximate initial Interest Rate[s] set forth herein. On or about the first Distribution Date, investors can obtain
the actual initial Interest Rate[s] for such Class[es] for the related Accrual Period from the Trustee's website, [
].
[(2) MX Class.]
[NOTE TO TRUST COUNSEL: For REMIC HWAC/HZ/DLY Classes backed by Fixed
HECM MBS:
[Each of] Class[es] [ ] [and [ ]] is an HWAC Class that will bear interest during each Accrual
Period at a per annum rate equal to the WACR of the [related] Trust Assets.]
[NOTE TO TRUST COUNSEL: For MX HWAC/HZ/DLY and MX HWAC/IO/DLY Classes:
[Each of] Class[es] [ ] [and [ ]] is an MX Class that is an HWAC Class that will accrue interest
during each Accrual Period at an equivalent annualized rate derived by aggregating the accrued
interest on its related REMIC Class[es] for such Accrual Period expressed as a percentage of its
outstanding [principal] [or] [notional] balance for such Accrual Period[, subject to certain
limitations as set forth under "Description of the Securities — Modification and Exchange" in this
Supplement].]
[[NOTE TO TRUST COUNSEL: Insert applicable definitions for
interest only classes and certain other offered classes; the following is illustrative.]
Interest Rate for [the][each] Interest Only Class [(other than the MX Class[es])]: For any
Distribution Date, a per annum rate equal to the product of (i) 12 multiplied by (ii) the quotient of
(a) the excess, if any, of (I) the interest accrued for the Accrual Period immediately preceding such
Distribution Date on the [related] Trust Asset[s] [Group] [or Subgroup] over (II) the [sum of the]
Interest Accrual Amount[s] for [the] [all related] Principal Bearing Class[es] for such Distribution
Date, divided by (b) the sum of the Class Principal Balance[s] of the [related] Stripped Principal
Bearing Class[es] and the Deferred Interest Amount[s] of the related Interest Only Class[es] as of
the related Record Date for such Interest Only Class.
[NOTE TO TRUST COUNSEL: For HWAC/HZ/DLY Classes:
Interest Rate for Class [PT]: For any Distribution Date, a per annum rate equal to the product of
(i) 12 multiplied by (ii) the quotient of (a) the interest accrued for the Accrual Period immediately
6
NOTE TO TRUST COUNSEL: Organize Classes by Security Group.
S-9
VII-2-9
preceding such Distribution Date on the [related] Trust Asset[s] [Group] [or Subgroup], divided
by (b) the outstanding principal balance of the [related] Trust Asset[s] [Group] [or Subgroup] as
of the related Record Date for such Class.]
Distributions: On each Distribution Date, the following distributions will be made to the [related]
Securities: [NOTE TO TRUST COUNSEL: When describing a "sequential" paydown rule, use
language similar to the following: "Sequentially, to A and B, in that order . . . ." When describing
a "concurrent" paydown rule, use language similar to the following: "Concurrently, to A and B,
pro rata . . . ." include a separate waterfall for each security group, the following are illustrative]
[SECURITY GROUP [1]]
The [Group [1]] Available Distribution Amount will be allocated in the following order of
priority:
1. Concurrently, to [HA] and [HI], pro rata based on their respective Interest Accrual
Amounts, up to the Class [HA] Interest Accrual Amount and the Class [HI] Interest Accrual
Amount for such Distribution Date
2. To [HA], in reduction of its Class Principal Balance, up to the amount of the Class [HA]
Principal Distribution Amount for such Distribution Date, until retired
3. To [HI], until the Class [HI] Deferred Interest Amount is reduced to zero
4. To [HB], up to the Class [HB] Interest Accrual Amount for such Distribution Date
5. To [HB], in reduction of its Class Principal Balance, until retired
[SECURITY GROUP [2]]
1. The Subgroup [2]A Available Distribution Amount will be allocated in the following
order of priority:
a. Concurrently, to [JA] and [JI], pro rata based on their respective Interest Accrual
Amounts, up to the Class [JA] Interest Accrual Amount and the Class [JI] Interest Accrual
Amount for such Distribution Date
b. To [JA], in reduction of its Class Principal Balance, up to the amount of the
Class [JA] Principal Distribution Amount for such Distribution Date, until retired
c. To [JI], until the Class [JI] Deferred Interest Amount is reduced to zero
2. The Subgroup [2]B Available Distribution Amount will be allocated in the following
order of priority:
a. Concurrently, to [KA] and [KI], pro rata based on their respective Interest
Accrual Amounts, up to the Class [KA] Interest Accrual Amount and the Class [KI] Interest
Accrual Amount for such Distribution Date
S-10
VII-2-10
b. To [KA], in reduction of its Class Principal Balance, up to the amount of the
Class [KA] Principal Distribution Amount for such Distribution Date, until retired
c. To [KI], until the Class [KI] Deferred Interest Amount is reduced to zero
[SECURITY GROUP [3]]
The Group [3] Available Distribution Amount will be allocated in the following order of
priority:
1. Concurrently, to [FT] and [TI], pro rata based on their respective Interest Accrual
Amounts, up to the Class [FT] Interest Accrual Amount and the Class [TI] Interest Accrual
Amount for such Distribution Date
2. To [FT], in reduction of its Class Principal Balance, up to the amount of the Class [FT]
Principal Distribution Amount for such Distribution Date, until retired
3. To [TI], until the Class [TI] Deferred Interest Amount is reduced to zero
[SECURITY GROUP [4]]
The [Group [4]] Available Distribution Amount will be allocated in the following order of
priority:
1. To [PT], up to the Class [PT] Interest Accrual Amount for such Distribution Date
2. To [PT], in reduction of its Class Principal Balance, until retired
[SECURITY GROUP [5]]
The [Group [5]] Available Distribution Amount will be allocated in the following order of
priority:
1. Concurrently, to [AI], [FA] and [FI], pro rata based on their respective Interest Accrual
Amounts, up to the Class [AI] Interest Accrual Amount, the Class [FA] Interest Accrual Amount
and the Class [FI] Interest Accrual Amount for such Distribution Date
2. To [FA], in reduction of its Class Principal Balance, up to the amount of the Class [FA]
Principal Distribution Amount for such Distribution Date, until retired
3. Concurrently, to [AI] and [FI], pro rata based on their respective Deferred Interest
Amounts, until the Class [AI] Deferred Interest Amount and the Class [FI] Deferred Interest
Amount are reduced to zero
[SECURITY GROUP [6]]
The [Group [6]] Available Distribution Amount will be allocated in the following order of
priority:
S-11
VII-2-11
1. Concurrently, to [BI], [FB] and [FC], pro rata based on their respective Interest Accrual
Amounts, up to the Class [BI] Interest Accrual Amount, the Class [FB] Interest Accrual Amount
and the Class [FC] Interest Accrual Amount for such Distribution Date
2. Concurrently, to [FB] and [FC], pro rata, in reduction of their Class Principal Balances,
up to the amount of the Group [6] Principal Distribution Amount for such Distribution Date, until
retired
3. To [BI], until the Class [BI] Deferred Interest Amount is reduced to zero
[SECURITY GROUP [7]]
The Group [7] Available Distribution Amount will be allocated in the following order of
priority:
1. Concurrently, to [FG] and [GI], pro rata based on their respective Interest Accrual
Amounts, up to the Class [FG] Interest Accrual Amount and the Class [GI] Interest Accrual
Amount for such Distribution Date
2. To [FG], in reduction of its Class Principal Balance, up to the amount of the Class [FG]
Principal Distribution Amount for such Distribution Date, until retired
3. To [GI], until the Class [GI] Deferred Interest Amount is reduced to zero
[SECURITY GROUP [8]]
The Group [8] Available Distribution Amount will be allocated in the following order of
priority:
1. Concurrently, to [GA], [IB] and [BA], pro rata based on their respective Interest Accrual
Amounts, up to the Class [GA] Interest Accrual Amount, the Class [IB] Interest Accrual Amount
and the Class [BA] Interest Accrual Amount for such Distribution Date
2. Concurrently, to [GA] and [BA], pro rata based on their respective Class Principal
Balances, in reduction of their Class Principal Balances, up to the amount of the Group 16 Principal
Distribution Amount for such Distribution Date, until retired
3. To [IB], until the Class [IB] Deferred Interest Amount is reduced to zero
4. To [GZ], up to the Class GZ Interest Accrual Amount for such Distribution Date
5. To [GZ], in reduction of its Class Principal Balance, until retired
Available Distribution Amount: [For [each] [of][ Security Group[s] [ ] through [ ], with][With]
respect to each Distribution Date, the excess, if any, of (a) the sum of (i) the product of (A) the
original principal amount of the [related] [Group or Subgroup, as applicable,] HECM MBS [or
Ginnie Mae Platinum Certificate backed by HECM MBS, as applicable,] and (B) the Certificate
Factor [(including Ginnie Mae Platinum Factor)] or Calculated Certificate Factor, as applicable,
S-12
VII-2-12
for the preceding Distribution Date and (ii) the interest accrued with respect to such HECM MBS
for the related Accrual Period over (b) the product of (i) the original principal amount of such
HECM MBS [or Ginnie Mae Platinum Certificate backed by HECM MBS, as applicable,] and
(ii) the Certificate Factor [(including Ginnie Mae Platinum Factor)] or Calculated Certificate
Factor, as applicable, for the current Distribution Date. [For Security Group [8], with respect to
each Distribution Date, the amounts received in respect of the Group [8] Trust Asset[s] on such
Distribution Date.]
For purposes of the definitions herein, the following [Security and Trust Asset Groups] [or
Subgroups] [and] Classes are related and categorized as follows:
Trust Asset Group
[or Subgroup]7
Interest Only
Classes
1 11
1
2 12
Security
Group 7
Principal Bearing Classes 8
Stripped Principal
Bearing Classes 9
Other
Principal
Bearing Classes 10
HI
HA
HB
2A
JI
JA
N/A
2
2B
KI
KA
N/A
3
3
TI
FT
N/A
4 13
4
N/A
N/A
PT
5 14
5
AI, FI
FA
N/A
6 15
6
BI
FB, FC
N/A
7
7
GI
FG
N/A
7
NOTE TO TRUST COUNSEL: Omit this column if the transaction is structured as a single group.
8
NOTE TO TRUST COUNSEL: “Principal Bearing Classes” are (i) Principal Only Classes or (ii) Classes that
have a Class Principal Balance and are entitled to payments of both principal and interest (excluding Interest Only
Classes with nominal Class Principal Balances).
9
NOTE TO TRUST COUNSEL: “Stripped Principal Bearing Classes” are Principal Bearing Classes with a
related Interest Only Class whose Notional Balance is determined by reference to (i) the Class Principal Balance
of such Principal Bearing Class or (ii) the outstanding principal balance of the related Trust Asset Group or
Subgroup.
10
NOTE TO TRUST COUNSEL: “Other Principal Bearing Classes” are Principal Bearing Classes in the same
Security Group that are not Stripped Principal Bearing Classes.
11
NOTE TO TRUST COUNSEL: For Groups or Subgroups structured with 1 NTL and 2 P&I Classes where the
NTL reduces with 1 of the P&I Classes and with the NTLs own Deferred Interest Amount.
12
NOTE TO TRUST COUNSEL: For Groups or Subgroups structured with 1 NTL and 1 P&I Class where the
NTL reduces with 100% of the Trust Asset Group or Subgroup.
13
NOTE TO TRUST COUNSEL: For HWAC/HZ/DLY Classes that are the only securities offered in the related
Group or Subgroup.
14
NOTE TO TRUST COUNSEL: For Groups or Subgroups structured with 2 NTLs and 1 P&I Class where each
NTL reduces with 50% of the P&I Class.
15
NOTE TO TRUST COUNSEL: For Groups or Subgroups structured with 1 NTL and 2 P&I Classes where NTL
reduces with 100% of Trust Assets and principal pays pro rata on P&I Classes.
S-13
VII-2-13
Security
Group 7
8
Trust Asset Group
[or Subgroup]7
Interest Only
Classes
8
[IB]
Principal Bearing Classes 8
Stripped Principal
Bearing Classes 9
Other
Principal
Bearing Classes 10
GA, [BA]
GZ
Deferred Interest Amount for [the][each] Interest Only Class [(other than the MX
Class[es])]: With respect to any Distribution Date, the excess, if any, of (i) the sum of all Interest
Accrual Amounts for such Interest Only Class for each Accrual Period ending before such
Distribution Date over (ii) the sum of (a) all amounts distributed in respect of such Class on all
prior Distribution Dates plus (b) the amount distributed as an Interest Accrual Amount in respect
of such Class on such Distribution Date, as specified [for the related Security Group] in “Terms
Sheet — Distributions” in this Supplement. On or about each Distribution Date, the Deferred
Interest Amount is available on reports published by the Trustee on its website, www.[ ].
[Deferred Interest Amount for Class[es] [IO][,][CI][and][MI] 16: With respect to any
Distribution Date, the sum of the Deferred Interest Amounts for the related REMIC Classes shown
on Schedule I to this Supplement.]
Interest Accrual Amount for [the][each] Interest Only Class [(other than the MX Class[es])]:
For any Distribution Date, interest accrued during the related Accrual Period for such Distribution
Date at the related Interest Rate on the Class Notional Balance of such Class as of the related
Record Date.
[Interest Accrual Amount for Class[es] [IO][,][CI][and][MA] 17: For any Distribution Date, the
sum of the Interest Accrual Amounts for the related REMIC Classes shown on Schedule I to this
Supplement.]
Interest Accrual Amount for Principal Bearing Classes [(other than the MX Class[es])]: For
any Distribution Date, interest accrued during the related Accrual Period for such Distribution
Date at the related Interest Rate on the Class Principal Balance of such Class as of the related
Record Date.
Principal Distribution Amount for [each] [the] Stripped Principal Bearing Class [(other than
Class[es] [FB and FC] [in Security Groups [ ] and [ ]])]: For any Distribution Date, the product
of (i) the excess, if any, of (a) the [related Group] [or Subgroup] Available Distribution Amount
for such Distribution Date over (b) the sum of the Interest Accrual Amount for the Stripped
Principal Bearing Class[es] and the Interest Accrual Amount for the [related] Interest Only Class
for such Distribution Date, and (ii) the quotient of (a) the Class Principal Balance of the Stripped
Principal Bearing Class[es] as of the related Record Date divided by (b) the sum of (x) the Class
Principal Balance of the Stripped Principal Bearing Class as of the related Record Date and (y) the
Deferred Interest Amount of the [related] Interest Only Class as of the related Record Date.
16
NOTE TO TRUST COUNSEL: List all MX IO classes for which this definition applies.
17
NOTE TO TRUST COUNSEL: List all MX IO classes for which this definition applies.
S-14
VII-2-14
[Principal Distribution Amount for [Group] [6] [8] [Subgroup] [8A]] Trust Assets: For any
Distribution Date, the product of (i) the excess, if any, of (a) the [related Group] [or Subgroup]
Available Distribution Amount for such Distribution Date over (b) the sum of the Interest Accrual
Amount[s] for [all related] [the] Principal Bearing Classes and the Interest Accrual Amount for
the [related] Interest Only Class[es] for such Distribution Date, and (ii) the quotient of (a) the Class
Principal Balance of [all related] [the] Principal Bearing Classes as of the related Record Date
divided by (b) the sum of (x) the Class Principal Balance of [all related] [the] Principal Bearing
Classes, as of the related Record Date and (y) the Deferred Interest Amount of the [related] Interest
Only Class[es] as of the related Record Date.]
[NOTE TO TRUST COUNSEL: Additional structures may require additional disclosure.]
Notional Class[es]: The Notional Class[es] will not receive distributions of principal based on
[its][their] Class Notional Balance[s] but [has][have] [a] Class Notional Balance[s] for
convenience in describing [its][their] entitlement[s] to interest. The Class Notional Balance of
[the][each] Notional Class represents the percentage indicated below of, and reduces or increases
to that extent with, [(1)] the outstanding principal balance of the [related] Trust Asset[s] [Group,]
[Groups,] [Subgroup] or [Subgroups] indicated[,] [or (2) with the Class Principal Balance[s] and
Deferred Interest Amount[s] indicated]: 18
Original Class
Notional Balance
Class
Represents [Approximately]
Security Group [1]
[HI] ..........
[100]% of Class [HA] (HSEQ) and [100]% of the
Class [HI] Deferred Interest Amount
Security Group [2]
[IO] ..........
[JI] ...........
[KI] ..........
Security Group [3]
[TI]
Security Group [5]
[AI] ..........
[FI]...........
[FI] ..........
Security Group [6]
[BI] ..........
100% of the Subgroup [2A] and Subgroup [2B] Trust
Assets (in the aggregate)
100% of the Subgroup [2A] Trust Assets
100% of the Subgroup [2B] Trust Assets
100% of the Group [3] Trust Assets
50% of the Group [5] Trust Assets
50% of the Group [5] Trust Assets
[50]% of the Group [5] Trust Assets
$
[100]% of the Group [6] Trust Assets
[NOTE TO TRUST COUNSEL: The following is illustrative:
Tax Status:
Double REMIC Series [as to each Group of Trust Assets.] [as to each of the
following Groups of Trust Assets and related Trust REMICs:
Trust Assets
Group [ ] Trust Assets
Group [ ] Trust Assets
18
Trust REMIC
Group [ ] Pooling REMIC and Group [ ] Issuing REMIC
Group [ ] Pooling REMIC and Group [ ] Issuing REMIC]
G
NOTE TO TRUST COUNSEL: Organize Classes by Security Group.
S-15
VII-2-15
[Separate REMIC elections will be made as to [the Issuing REMIC and the Pooling REMIC for
each Group of Trust Assets] [as to each of the Trust REMICs identified above].] See "Certain
United States Federal Income Tax Consequences" in this Supplement and in the Base Offering
Circular.
Regular and Residual Classes: [Class RR is a Residual Class and represents the Residual
Interest of the Issuing and Pooling REMICs.] [Classes RR1[,] [and] RR2[,] [RR3], [RR4] [and]
[RR5] are Residual Classes. Each of the Residual Classes represents the Residual Interest of the
[Issuing and Pooling REMICs for the Group of Trust Assets with the same numerical designation]
[related Trust REMICs, as described under "Certain United States Federal Income Taxes –
Residual Securities" in this Supplement]. All other Classes of REMIC Securities are Regular
Classes. See "Certain United States Federal Income Tax Consequences" in this Supplement and
in the Base Offering Circular.
S-16
VII-2-16
RISK FACTORS
You should purchase securities only if you understand and are able to bear the associated
risks. The risks applicable to your investment depend on the principal and interest type of your
securities. This section highlights certain of these risks.
principal payments, including prepayments,
on the related HECMs. Any such event may
damage the related mortgaged properties that
secure the HECMs or may lead to a general
economic downturn in the affected regions,
including job losses and declines in real
estate values. A general economic downturn
may increase the rate of defaults on the
HECMs in such areas resulting in
prepayments on the HECMs related to the
participations underlying the trust assets due
to governmental mortgage insurance claim
payments, loss mitigation arrangements,
repurchases or liquidations of defaulted
HECMs. Insurance payments on damaged or
destroyed homes may also lead to
prepayments on the related HECMs. Further,
in connection with presidentially declared
major disasters, Ginnie Mae may authorize
optional special assistance to issuers,
including expanded buyout authority which
allows issuers, upon receiving written
approval from Ginnie Mae, to repurchase
eligible HECMs from the related pool
underlying a Ginnie Mae MBS certificate,
even if such HECMs do not otherwise meet
the standard conditions for removal or
repurchase.
The rate of principal payments on the
HECMs related to the participations
underlying the trust assets will affect the
rate of principal payments on your
securities. The rate at which you will receive
principal payments will depend largely on the
rate of principal payments, including
prepayments, on the HECMs related to the
participations underlying the trust assets.
Any historical data regarding mortgage loan
prepayment rates may not be indicative of the
rate of future prepayments on the related
HECMs, and no assurances can be given
about the rates at which the related HECMs
will prepay. We expect the rate of principal
payments on the HECMs related to the
participations underlying the trust assets to
vary. Borrowers generally may prepay their
HECMs at any time without penalty.
In addition to voluntary prepayments,
HECMs can be prepaid as a result of
governmental mortgage insurance claim
payments, loss mitigation arrangements,
repurchases or liquidations of defaulted
HECMs.
Although under certain
circumstances Ginnie Mae issuers have the
option to repurchase defaulted HECMs from
the related pool underlying a Ginnie Mae
HECM MBS certificate, they are not
obligated to do so. Defaulted HECMs that
remain in pools backing Ginnie Mae HECM
MBS certificates may be subject to
governmental mortgage insurance claim
payments, loss mitigation arrangements or
foreclosure, which could have the same effect
as voluntary prepayments on the cash flow
available to pay the securities.
No assurances can be given as to the timing
or frequency of any governmental mortgage
insurance
claim
payments,
issuer
repurchases, loss mitigation arrangements or
foreclosure proceedings with respect to
defaulted HECMs and the resulting effect on
the timing or rate of principal payments on
your securities.
It is uncertain when payments will be made
in respect of securities backed by HECM
MBS. The rate of voluntary prepayments and
A catastrophic weather event, pandemic or
other natural disaster may affect the rate of
S-17
VII-2-17
whether to exercise any optional Ginnie Mae
issuer purchase event.
the occurrence of maturity events and Ginnie
Mae issuer purchase events with respect to
HECMs are uncertain. A borrower may
prepay in whole or in part the outstanding
balance of a HECM at any time without
penalty, including any accrued interest
thereon. No interest or principal is required
to be paid by the borrower, however, until
maturity, which generally occurs upon the
occurrence of a maturity event, which may be
deferred under certain circumstances. A
Ginnie Mae issuer of a HECM MBS is
obligated to purchase, under certain
circumstances, all participations related to a
HECM.
The enforceability of some HECM maturity
event clauses may be uncertain. HECMs
contain clauses defining maturity events.
The clauses in some HECMs permit the
issuer to declare the HECM due and payable
upon the death of the last surviving borrower.
Litigation by surviving non-borrower
spouses may interfere with or affect the
ability of the issuer to realize upon the
collateral. The inability to enforce a due-ondeath clause may affect the weighted average
lives and the yields realized by investors in
the securities.
It is uncertain when any amounts might be
paid on securities backed by HECM MBS
because it is uncertain (i) whether a HECM
borrower will choose to prepay amounts
advanced in whole or in part, (ii) when any
maturity event might occur, whether that
maturity event will be deferred and, if so, the
extent of the deferral, and (iii) when any
Ginnie Mae issuer purchase event might
occur, and thus the yields on and weighted
average lives of securities backed by HECM
MBS may differ substantially from an
investor's expectations. See "Risk Factors"
and "Prepayment and Yield Considerations"
in the HECM MBS Base Prospectus and
"Yield,
Maturity
and
Prepayment
Considerations" in this supplement.
Rates of principal payments can reduce
your yield. The yield on your securities
probably will be lower than you expect if:
•
you bought your securities at a
premium (interest only securities, for
example) and principal payments are
faster than you expected, or
•
you bought your securities at a
discount and principal payments are
slower than you expected.
In addition, if your securities are interest only
securities or securities purchased at a
significant premium, you could lose money
on your investment if prepayments occur at a
rapid rate.
From time to time FHA and the residential
mortgage industry make changes to the
requirements, procedures and related fees for
originating, refinancing and servicing
HECMs. Any of these changes may result in
HECM MBS backed by participations related
to HECMs subject to different underwriting
or servicing requirements or procedures.
Such changes may impact borrower
prepayment, delinquency, refinance and
mortgage insurance claim rates and may
influence the decision by a Ginnie Mae issuer
HECM borrowers may choose from various
payment plans, each of which has different
prepayment characteristics that may affect
the weighted average lives and yields of the
securities. For example, line of credit
payment plans may experience higher
prepayment rates than other payment plans.
To the extent that the HECMs include a large
concentration of line of credit HECMs, such
HECMs may experience higher prepayment
rates. Higher prepayment rates will reduce,
S-18
VII-2-18
[NOTE TO TRUST COUNSEL: For
Floating Rate classes backed by Fixed Rate
HMBS: The WACR of the [[sub]group [ ]]
trust assets may limit the amount of interest
distributed to or accrued on the [related]
floating rate and notional class[es]. The
interest entitlements of [the [group [
]]
floating rate class[es]][Class [ ]] [is][are]
capped at the WACR of the [related] trust
assets. If the WACR of the [group [ ]] trust
assets is equal to or lower than the interest
rate on the [related] floating rate class based
on the interest rate formula as shown under
"Terms Sheet — Interest Rates" in this
supplement for any accrual period, interest
entitlements with respect to [the [related]
interest only class][Class[ ]] may be reduced
to zero because such class is entitled to
receive the excess of interest accrued in
respect of the [related] trust assets over the
interest accrued on the [related] floating rate
class. In addition, if the WACR of the
[[sub]group [ ]] trust assets is lower than the
interest rate on [the [related] floating rate
class][Class [ ]] based on its interest rate
formula as shown under "Terms Sheet —
Interest Rates" in this supplement for any
accrual period, interest accruing on
[the][such] floating rate class will be reduced
because the interest rate on such class is
capped at a rate equal to the WACR of the
[related] trust assets.]
perhaps significantly, the weighted average
lives of the securities. Reductions in the
weighted average lives of the securities will
affect the yields on the securities. HECM
borrowers may have the ability to change to
another available payment plan at any time as
long as the change complies with the FHA
requirements in effect. See "The Trust Assets
— The Participations and the HECMs" in
this supplement.
A HECM that has been drawn up to its
principal limit, or becomes drawn up to its
principal limit early in its term, could result
in a reduction of the weighted average lives
of and yields on the related securities. A
borrower's principal limit for a HECM
represents the maximum disbursement that
the borrower can receive under the HECM
and is calculated, in part, on the basis of the
maximum claim amount for such HECM.
The borrower's access to the principal limit
may be restricted by the FHA loan
origination requirements applicable to the
related HECM. The maximum claim amount
for a HECM generally represents the lender's
maximum insurance claim from HUD for
such HECM. A HECM with a loan balance
that is approaching or has reached its
principal limit, or that is fully drawn early in
its term, is likely to reach its maximum claim
amount sooner than a HECM with significant
remaining credit availability that is drawn
over an extended period of time. When a
HECM approaches its maximum claim
amount, a mandatory purchase event or a
98% optional purchase event may occur. If a
purchase of all participations relating to a
HECM occurs under such a Ginnie Mae
issuer purchase event, the purchase will result
in a payment in respect of the related
securities and will reduce the weighted
average lives of such securities. Reductions
in the weighted average lives of the securities
will affect, perhaps significantly, the yields
on the securities.
[NOTE TO TRUST COUNSEL: For
floating rate classes backed by floating rate
underlying certificates: The Underlying
Certificate WACR of the [sub]group [ ][,]
[and] [ ] [and] [ ] trust asset[s] may limit
the amount of interest distributed to or
accrued on the [related] floating rate and
notional classes. The interest entitlements of
Class[es] [ ][[,] [and] [ ] [and] [ ], as
applicable,] [is][are] capped at the
Underlying Certificate WACR of the related
trust asset[s], which [is][are] [an] underlying
certificate[s]. In turn, the interest
S-19
VII-2-19
entitlements of [(i)] [each of] [the
underlying certificate[s] included in trust
asset [sub]group [ ][,] [and] [ ] [and] [ ]
[is][are] capped at the WACR of its related
underlying trust assets] [and (ii)] [the
underlying certificate[s] included in trust
asset [sub]group [ ][,] [and] [ ] [and] [ ]
[is][are] capped at the lesser of a related
maximum rate and the WACR of its
[related] underlying trust assets], [in each
case] as described in the related underlying
certificate disclosure document. If the
Underlying Certificate WACR of the
[sub]group [ ][,] [and] [ ] [and] [ ] trust
assets is equal to or lower than the interest
rate on the related floating rate class based
on the interest rate formula as shown under
“Terms Sheet — Interest Rates” in this
supplement for any accrual period, interest
entitlements with respect to Class[es] [ ][,]
[and] [ ] [and] [ ][, as applicable,] may be
reduced to zero because such class is
entitled to receive the excess of interest
accrued in respect of the related trust assets
over the interest accrued on the related
floating rate class. In addition, if the
Underlying Certificate WACR of the
[sub]group [ ][,] [and] [ ] [and] [ ] trust
assets is lower than the interest rate on
[INSERT RELATED FLTs] Class[es] [ ][[,]
[and] [ ] [and] [ ], as applicable,] based on
its related interest rate formula as shown
under “Terms Sheet — Interest Rates” in
this supplement for any accrual period,
interest accruing on such floating rate class
will be reduced because the interest rate on
such class is capped at a rate equal to the
Underlying Certificate WACR of the related
trust assets.]
the [group [ ] and [ ]] Trust Assets or
securities will affect payments and yields on
the [group [ ] and [ ]] securities. [NOTE
TO TRUST COUNSEL: For Index on the
Securities and Index on the Trust Assets: If
any interest rate index applicable to the Trust
Assets or the securities performs differently
from what you expect, the yield on your
securities may be lower than you expect.
Lower levels of any applicable interest rate
index [NOTE TO TRUST COUNSEL: use
"may" if index on adjustable rate HECMs is
different than index on related securities (but
not solely if HECMs are Adjusted CME
Term SOFR and securities are CME Term
SOFR), otherwise, use "will generally"]
reduce the yield on floating rate securities.
You should bear in mind that the timing of
changes in any applicable interest rate index
may also affect your yield: generally the
earlier a change in an applicable interest rate
index occurs, the greater the effect such
change will have on your yield. It is doubtful
that any applicable interest rate index will
remain constant.
[NOTE TO TRUST COUNSEL: For ARM
HECM Index, not for HREMIC Security
Index: In addition, higher levels of any
interest rate index applicable to adjustable
rate HECMs will increase the rate at which
such HECMs reach their maximum claim
amounts. When a HECM approaches its
maximum claim amount, certain Ginnie Mae
issuer purchase events could occur resulting
in a prepayment in respect of the related
securities and reductions in the weighted
average lives of the related securities.
Reductions in the weighted average lives of
the securities will affect, perhaps
significantly, the yields on the securities.]
[NOTE TO TRUST COUNSEL: For ARM
HECM backed groups, any group with
REMIC securities whose interest rate is
based on an Index and any re-REMIC FLT
group backed by ARM HECM: The levels of
any interest rate ind[ex][ices] applicable to
[The]
interest
rate
[A][a]pplicable
ind[ex][ices] for the group [ ] and [ ] Trust
Assets and securities [is][are] identified
under "Terms Sheet — Trust Assets" and "—
Interest Rates" in this supplement.
S-20
VII-2-20
[NOTE TO TRUST COUNSEL: For
Floating Rate Classes backed by ARM
HECM MBS groups with the same index:
The [applicable] interest rate ind[ex][ices]
for the HECMs related to the participations
underlying the [[sub][group [ ] and [ ]] trust
assets, may not equal the [applicable]
interest rate ind[ex][ices] for the [[group [ ]
and [ ]] securities, which may impact,
perhaps significantly, the amount of interest
distributable to the [group [ ] [and [ ]]]
securities. The [applicable] interest rate
ind[ex][ices] for the HECMs related to the
participations underlying the [[sub]group [ ]
[and [ ]]] trust assets may be determined at
different times and from a different source
than the [applicable] interest rate
ind[ex][ices] on the related securities.
[NOTE TO TRUST COUNSEL: For
ANNUAL adjustable rate HECM MBS
backed groups with related ANNUAL
adjustable rate REMIC securities:
In
addition, the annual adjustable rate HECMs
related to the participations underlying each
[[sub]group [ ] [and [ ]]] trust asset may have
different interest rate adjustment dates, which
may affect the WACR of the [related] HECM
MBS and may magnify the difference
between the WACR of the [related] trust
asset [[sub]group] and the interest rates on
the [related] securities.]
[is][are] significantly lower than the
applicable interest rate ind[ex][ices] for the
related securities for any accrual period,
interest accruing on the [related] floating rate
class will be reduced because the interest rate
on such floating rate class is capped at a rate
equal to the weighted average coupon rate of
the [related] HECM MBS. In the event that
the applicable interest rate ind[ex][ices] for
the HECMs related to the participations
underlying the [[sub]group [ ] [and [ ]]] trust
assets [is][are] higher than the applicable
interest rate ind[ex][ices] for the related
securities, interest accruing on the [related]
floating rate class will not be affected but
interest accruals with respect to the [related]
notional class will be increased.]
[NOTE TO TRUST COUNSEL: For ARM
HECM MBS backed groups: Adjustable rate
HECMs are subject to limitations on
interest rate adjustments, which may limit
the amount of interest payable in respect of
the related HECM MBS and may limit the
WACR on the related HECM MBS and the
interest rates on the [group [ ] [and [ ]]]
securities. If the applicable interest rate
ind[ex][ices] increase[s] to a sufficiently high
level, the interest rates on the adjustable rate
HECMs related to the participations
underlying the [[sub]group [ ] [and [ ]]]
trust assets may be limited by caps. As a
result, the WACR on the related HECM
MBS, as well as the interest rates on the
related securities, may be limited. The
application of any caps on the adjustable rate
HECMs may significantly impact the interest
rate[s] on the interest only class[es] in
group[s] [ ] [and] [ ] because the interest
entitlement of such class[es] of securities is
entirely dependent on the WACR [or
Underlying Certificate WACR] of the
[related] trust asset[s] [group] [or]
[subgroup].]
If the applicable interest rate ind[ex][ices] for
the HECMs related to the participations
underlying the [[sub]group [ ] [and [ ]]] trust
assets [is][are] lower than the applicable
interest rate ind[ex][ices] for the [related]
securities for any accrual period, interest
accruals with respect to the [related] notional
class will be reduced because such notional
class is entitled to receive the excess of
interest accrued in respect of the [related]
trust assets over the interest distributable to
the [related] floating rate class. In addition,
if the applicable interest rate ind[ex][ices] for
the HECMs related to the participations
underlying the [[sub]group [ ]] trust assets
[The maximum rate on [the][each] floating
rate class could limit the amount of interest
S-21
VII-2-21
that accrues on such class. [The][Each]
floating rate class [(other than Class [NOTE
TO TRUST COUNSEL: List each REMIC
and MX Floating Rate Class that does not
have a specified maximum rate in the interest
rate table in the terms sheet])] is subject to a
maximum rate which is equal to [NOTE TO
TRUST COUNSEL: This language does
not apply to a Class with a maximum rate
equal to WACR alone: the lesser of the
[related] maximum rate set forth under
"Terms Sheet — Interest Rates" for that class
and] the WACR for the [related] trust asset[s]
[group] [or] [subgroup]. [If the applicable
interest rate ind[ex][ices] exceed[s] certain
levels, the interest rate of [the][each] floating
rate class [(other than Class [NOTE TO
TRUST COUNSEL: List each REMIC and
MX Floating Rate Class that does NOT have
a specified maximum rate in the interest rate
table in the terms sheet])] may be capped at
the [related] maximum rate set forth under
"Terms Sheet — Interest Rates" for that class,
even in instances when such rate is less than
the WACR for the [related] trust asset[s]
[group] [or] [subgroup].]
[NOTE TO
TRUST COUNSEL: For MX Floating Rate
Classes: The maximum rate on [each of]
class[es] [ ] [and [ ]] is limited by the interest
accrued on its related REMIC classes. If the
applicable interest rate ind[ex][ices] exceeds
certain levels, the interest rate[s] on each of
class[es] [ ] [and [ ]] will be capped to the
extent that the interest rates on its related
REMIC classes are capped as described in the
second immediately preceding sentence.]
[NOTE TO TRUST COUNSEL: For each
REMIC Class that does not have a specified
maximum rate in the interest rate table in the
terms sheet: Class [ ] is subject to a
maximum rate that is equal to the WACR [or
Underlying Certificate WACR] for the
related trust asset [sub]group.]]
than the HECMS (for example, a group with
one-month CME Term SOFR REMIC
securities backed by participations based on
one-year Adjusted CME Term SOFR:
The mortgage interest rate [index][indices]
for the HECMs related to the participations
directly or indirectly underlying the [group
] trust assets [(and the interest rate
the underlying
[index][indices] for
certificates included in trust asset
[sub]group[s] [ ])] [is][are] different than
the interest rate [index][indices] for the
related securities, which may impact,
perhaps significantly, the amount of interest
distributable to the securities after any
applicable initial fixed rate period of the
related HECMs. Because of the differences
in how, when and how often the applicable
interest rate [index][indices] for such
HECMs [and underlying certificate[s]]
[is][are] determined compared to how, when
and how often the related securities interest
rate [index][indices] [is][are] determined,
there may be a mismatch between the interest
rates on the [group ] trust assets and the
interest rates on the related securities. In
addition, the HECMs related to the [group ]
trust assets may have different [monthly] [or]
[annual] interest rate adjustment dates, which
may affect the WACR of the related HECM
MBS and the interest entitlements of the
[group ] trust assets and may magnify the
difference between the WACR of the [group
] trust assets and the interest rates on the
related securities.
If the applicable interest rate [index][indices]
for such HECM MBS [or underlying
certificate[s]] [is][are] lower than the related
securities interest rate [index][indices] for
any accrual period, interest accruals with
respect to the related notional class[es] may
be reduced because such notional class[es]
[is][are] entitled to receive the excess of
interest accrued in respect of the related trust
assets, as applicable, over the interest
[NOTE TO TRUST COUNSEL: For
ARM HECM MBS backed groups with
REMIC Classes based on a different index
S-22
VII-2-22
distributable to the related floating rate class
[or classes]. In addition, if the applicable
interest rate [index][indices] for such
HECMs [or underlying certificate[s]] are
significantly lower than the related securities
interest rate [index][indices] for any accrual
period, interest accruing on the related
floating rate class [or classes] may be reduced
because the interest rate on such floating rate
class [or classes] is capped at a rate equal to
the WACR [or Underlying Certificate
WACR] of the related trust assets, as
applicable. In the event that the applicable
interest rate [index][indices] for such
HECMs [or, subject to the limitations set
forth under [“The WACR of the [sub]group [
] trust assets may limit the amount of interest
distributed to or accrued on the related
floating rate and notional classes”][The
Underlying Certificate WACR of the
[sub]group [ ][,] [and] [ ] [and] [ ] trust
asset[s] may limit the amount of interest
distributed to or accrued on the [related]
floating rate and notional classes], for such
underlying certificate[s],] are higher than the
securities
interest
related
rate
[index][indices], interest accruing on the
related floating rate class [or classes] may not
be affected but interest accruals with respect
to the related notional class will be increased.
you may not be able to take advantage of
higher yielding investment opportunities.
The final payment on your security may
occur much earlier than the final distribution
date.
[The rate of reduction or increase in the
[principal] [and] [or] [notional] balance of
the underlying certificate[s] will directly
affect the rate of reduction or increase in the
[principal] [and] [notional] balance[s] of
the [group [8]] [class [__]] securities. The
underlying certificate[s] will be sensitive to
the rate of payments of principal (including
prepayments) of the related HECMs. This
supplement contains no information as to
whether the underlying certificate[s] [has]
[have] performed as originally anticipated.
Additional information as to the underlying
certificate[s] may be obtained by performing
an analysis of the current class factor of the
underlying certificate[s] in light of applicable
information contained in the underlying
certificate disclosure document[s].]
[NOTE TO TRUST COUNSEL: FOR
DEALS
WITH
UNDERLYING
MORTGAGE LOANS OR TRUST MBS
BASED ON ADJUSTED CME TERM
SOFR: 19
[The][underlying
certificate[s]][,]Trust MBS and any
underlying participations in HECMs with
interest rates originally based on LIBOR
will transition to the applicable LIBOR
replacement rate at the first contractual
reset date after June 30, 2023.
Representative publication of all tenors of the
London Interbank Offered Rate ("LIBOR")
ceased on June 30, 2023. All [underlying
certificates,] Trust MBS or underlying
HECM participations with an interest rate
based on LIBOR on June 30, 2023 will
transition at the first contractual reset date
An investment in the securities is subject to
significant reinvestment risk. The rate of
principal payments on your securities is
uncertain. You may be unable to reinvest the
payments on your securities at the same
returns provided by the securities. Lower
prevailing interest rates may result in an
unexpected return of principal. In that
interest rate climate, higher yielding
reinvestment opportunities may be limited.
Conversely, higher prevailing interest rates
may result in slower returns of principal and
Note to Trust Counsel: This paragraph applies only
to Trust Assets that have not yet reset at the applicable
LIBOR replacement rate.
19
S-23
VII-2-23
[ind[ex][ices]], and the [[class] [group] [ ]]
[floating rate] securities will likely have no
established trading market when issued, and
an established trading market may never
develop or, if developed, may not be liquid.
Market terms for securities indexed to [30day Average SOFR] [or] [CME Term SOFR]
may evolve over time, and trading prices of
some securities indexed to [30-day Average
SOFR] [or] [CME Term SOFR] may be
lower than those of later-issued securities as
a result. Similarly, if [30-day Average SOFR]
[or] [CME Term SOFR] does not prove to be
widely used in similar securities, the trading
price of related SOFR-Based Classes may be
lower than those of securities linked to
indices that are more widely used. Investors
in SOFR-Based Classes may not be able to
sell their securities at all or may not be able
to sell their securities at prices that will
provide them with a yield comparable to
similar investments that have a developed
secondary market, and may consequently
suffer from increased pricing volatility and
market risk.
after June 30, 2023 to the applicable Adjusted
CME Term SOFR. The spread adjustment
added to CME Term SOFR on the underlying
HECM participations will be lower than the
spread adjustment added to CME Term
SOFR on the Trust MBS during the one year
spread adjustment transition period provided
for consumers under the LIBOR Act.
Beginning in July 2024, for any given tenor,
the spread adjustments added to CME Term
SOFR
on
the
underlying
HECM
participations and the Trust MBS will be the
same.]
An investment in the [[class] [group] [ ]
[and] [ ]] [floating rate] securities entails
risks not associated with an investment in
conventional fixed rate securities or
securities linked to established market
indices. The Federal Reserve Bank of New
York began to publish SOFR in April 2018
and compounded averages of SOFR in March
2020. Although the Federal Reserve Bank of
New York has also published historical
indicative SOFR from August 2014 to March
2018, such pre-publication data necessarily
involves assumptions, estimates and
approximations. You should not rely on any
historical changes or trends in SOFR as an
indicator of future changes in SOFR. Daily
shifts in SOFR have been, and may in the
future be, greater than those in comparable
market indices. Because the interest rate
applicable to any accrual period for securities
with an interest rate based on SOFR will be
calculated by reference to the daily rates of
SOFR during an approximate 30-day) period
commencing and ending before the related
accrual period as described under
"Description of the Securities — Interest
Distributions — Floating Rate Class[es]" in
this supplement, the return on and value of
the [[class] [group] [ ]] [floating rate]
securities may fluctuate more than debt
securities linked to less volatile indices.
You should consult your own financial and
legal advisors about the risks associated with
an investment in the [[class] [group] [ ]]
[floating rate] securities and the suitability of
investing in the [class [ ]] [floating rate]
securities in light of your particular
circumstances.
Interest on the [[class] [group] [ ]] [floating
rate] securities will be determined using a
replacement rate if 30-day Average SOFR
[or CME Term SOFR] is no longer
available, which could adversely affect the
value of your investment in the [[class]
[group] [ ]] [floating rate] securities.
30-day Average SOFR [and CME Term
SOFR] [is][are] published by the Federal
Reserve Bank of New York [and CME
Group] based on data received from other
sources, and neither Ginnie Mae nor the
trustee has any control over its determination,
[30-day Average SOFR] [and] [CME Term
SOFR] [is a] [are] relatively new market
S-24
VII-2-24
"Description of the Securities — Interest
Rate Indices—Benchmark Replacement" in
the Base Offering Circular. This could reduce
the amount of interest payable on the [[class]
[group] [ ]] [floating rate] securities, which
could adversely affect the return on, value of,
and market for, the [[class] [group] [ ]]
[floating rate] securities. Furthermore, there
can be no assurance that the characteristics of
any replacement rate will be similar to 30-day
Average SOFR [or CME Term SOFR, as
applicable] or that any replacement rate will
produce the economic equivalent of 30-day
Average SOFR [or CME Term SOFR, as
applicable].]
calculation or publication. The activities of
the Federal Reserve Bank of New York [or
CME Group] may directly affect prevailing
30-day Average SOFR [or CME Term
SOFR, as applicable,] in unpredictable ways.
There can be no guarantee that 30-day
Average SOFR [or CME Term SOFR] will
not be discontinued or fundamentally altered
in a manner that is materially adverse to the
interests of holders of securities indexed to
30-day Average SOFR [or CME Term
SOFR, as applicable]. If the manner in which
30-day Average SOFR [or CME Term
SOFR] is calculated is changed or if 30-day
Average SOFR [or CME Term SOFR] is
discontinued, that change or discontinuance
may result in a reduction of the amount of
interest payable on applicable SOFR-based
Classes and the trading prices of such
Classes.
The securities may not be a suitable
investment for you.
The securities[,
especially Class [NOTE TO TRUST
COUNSEL: Insert mandatory exchange
classes and classes or groups backed by
underlying certificates], and,] in particular,
the interest only and residual classes, are not
suitable investments for all investors.
The Federal Reserve Bank of New York [and
CME Group] [has] [have] noted that [it]
[they] may alter the methods of calculation,
publication schedule, rate revision practices
or availability of 30-day Average SOFR [or
CME Term SOFR, as applicable,] at any time
without notice. There can be no assurance
that 30-day Average SOFR [or CME Term
SOFR] will not be discontinued or
fundamentally altered in a manner that is
materially adverse to the interests of
investors in the [[class] [group] [ ]] [floating
rate] securities.
In addition, although the sponsor intends to
make a market for the purchase and sale of
the securities after their initial issuance, it has
no obligation to do so. There is no assurance
that a secondary market will develop, that
any secondary market will continue, or that
the price at which you can sell an investment
in any class will enable you to realize a
desired yield on that investment.
If 30-day Average SOFR [or CME Term
SOFR, as applicable,] is no longer published
or cannot be used, the amount of interest
payable on the [[class] [group] [ ]] [floating
rate] securities will be determined using a
replacement rate, as described under
"Description of the Securities — Interest
Rate Indices — Benchmark Replacement" in
the Base Offering Circular. Ginnie Mae will
have the sole discretion to make conforming
changes in connection with any replacement
rate without the consent of security holders or
any other party, as described under
You will bear the market risks of your
investment. The market values of the classes
are likely to fluctuate. These fluctuations
may be significant and could result in
significant losses to you.
The secondary markets for mortgage-related
securities have experienced periods of
illiquidity and can be expected to do so in the
future. Illiquidity can have a severely
adverse effect on the prices of classes that are
especially sensitive to prepayment or interest
S-25
VII-2-25
It is highly unlikely that the HECMs will
prepay at any of the prepayment rates
assumed or draw at any of the draw rates
assumed, if any, in this supplement, or at any
constant rate.
rate risk or that have been structured to meet
the investment requirements of limited
categories of investors.
The residual securities may experience
significant adverse tax timing consequences.
Accordingly, you are urged to consult tax
advisors and to consider the after-tax effect
of ownership of a residual security and the
suitability of the residual securities to your
investment objectives. See "Certain United
States Federal Income Tax Consequences" in
this supplement and in the Base Offering
Circular.
Lack of publicly available information on
the HECMs and the related participations
underlying the trust assets may adversely
affect the liquidity of your securities.
Limited information will be made publicly
available regarding the performance of the
HECMs and the related participations
underlying the trust assets after the closing
date. The absence of publicly available
information may affect your ability to sell
your securities to prospective investors.
You are encouraged to consult advisors
regarding the financial, legal, tax and other
aspects of an investment in the securities.
You should not purchase the securities of any
class unless you understand and are able to
bear the prepayment, yield, liquidity and
market risks associated with that class.
The actual characteristics of the HECMs
and the participations underlying the trust
assets [and the underlying certificate[s]]
affect the weighted average lives and yields
of your securities. The yield and decrement
tables in this supplement are based on
assumed characteristics which are likely to be
different from the actual characteristics.
Furthermore, certain of the assumed
characteristics identified in Exhibit[s] A [and
E] to this supplement, such as maximum
claim amount and HECM MBS [or Ginnie
Mae Platinum Certificate] principal balance,
are calculated on an aggregate basis which
may cause results to differ, perhaps
significantly, from those calculated using the
actual characteristics of the trust assets on a
HECM or participation level basis. As a
result, the yields on your securities could be
lower than you expected, even if the HECMs
prepay at the constant prepayment rates set
forth in the applicable table.
S-26
VII-2-26
THE TRUST ASSETS
General
The Sponsor intends to acquire the Trust Assets in privately negotiated transactions prior
to the Closing Date and to sell them to the Trust according to the terms of a Trust Agreement
between the Sponsor and the Trustee. The Sponsor will make certain representations and
warranties with respect to the Trust Assets. All Trust Assets[, regardless of whether the assets
consist of Trust MBS or the Underlying Certificate[s],] will evidence, directly or indirectly, Ginnie
Mae Certificates.
The Trust MBS [(Groups 1 through 7)]
The [Group 1 through 7] Trust Assets are HECM MBS [or Ginnie Mae Platinum
Certificates backed by HECM MBS] guaranteed by Ginnie Mae, and are based on or backed by
Participations in advances made to borrowers and related amounts in respect of HECMs. Each
such HECM MBS will accrue interest at the interest rate for that HECM MBS for each accrual
period (the "HECM MBS Rate") as set forth in the related HECM MBS Disclosure Documents.
The HECM MBS Rate is generally equal to the weighted average of the interest rates on the
Participations (each, the "Participation Interest Rate").
[The interest rate of HECM MBS backed by Participations related to adjustable rate
HECMs may be limited by caps on the adjustable rate HECMs. See "Risk Factors — Adjustable
rate HECMs are subject to limitations on interest rate adjustments, which may limit the amount of
interest payable in respect of the related HECM MBS and may limit the WACR on the related
HECM MBS and the interest rates on the [group [ ]] securities" in this Supplement.]
With respect to each Participation, the Participation Interest Rate generally equals the
interest rate of the related HECM less the Servicing Fee Margin. The Servicing Fee Margin
generally represents the amount of the servicing compensation payable to the Ginnie Mae Issuer
and the Ginnie Mae guaranty fee. However, the Servicing Fee Margin may vary depending on the
Issue Date of the HECM MBS and whether the servicing compensation for the HECM is paid on
a flat monthly fee arrangement or as a portion of the mortgage interest rate.
Amounts accrued on each HECM MBS in respect of interest each month will equal the
product of (i) one-twelfth of the HECM MBS Rate and (ii) the unpaid and outstanding principal
amount of such HECM MBS at the end of the prior month. Each month the accrued interest with
respect to each HECM MBS will be added to the then outstanding principal balance of such HECM
MBS. There are no scheduled payments of interest. It is generally anticipated that no payment in
respect of any HECM MBS will be paid until the occurrence of a Maturity Event, which may be
deferred in certain circumstances, or in the event that a borrower makes a voluntary prepayment
in whole or in part of the outstanding principal balance of the related HECM or a Ginnie Mae
Issuer purchase event occurs.
The HECM MBS Disclosure Documents [or Platinum Certificate Disclosure Documents]
may be obtained from the Information Agent as described under "Available Information" in this
Supplement. Investors are cautioned that material changes in facts and circumstances may have
occurred since the date of the HECM MBS Disclosure Documents [or Platinum Certificate
S-27
VII-2-27
Disclosure Documents], including changes in prepayment rates, prevailing interest rates and other
economic factors, which may limit the usefulness of, and be directly contrary to the assumptions
used in preparing the information included in, the offering document.
[Ginnie Mae Platinum Program. Under the Ginnie Mae Platinum Program, the holder of
a number of Ginnie Mae I Certificates or Ginnie Mae II Certificates may deposit those certificates
into a trust, and in each case, the depositor will receive a larger denominated Ginnie Mae Platinum
Certificate. If the Ginnie Mae I Certificates or Ginnie Mae II Certificates deposited bear a fixed
rate of interest, then all certificates (other than HECM MBS) deposited must bear the same fixed
rate. Fixed rate HECM MBS may be combined with other fixed rate HECM MBS in exchange for
a Ginnie Mae Platinum Certificate that bears interest at the weighted average coupon of the
deposited HECM MBS. Adjustable rate Ginnie Mae II Certificates may be combined with other
adjustable rate Ginnie Mae II Certificates with the same index and periodic and lifetime caps, but
without regard to interest rate or payment adjustment dates, in exchange for a Ginnie Mae Platinum
Certificate that bears interest at the weighted average coupon of the deposited Ginnie Mae II
Certificates. For purposes of the Base Offering Circular and this Offering Circular Supplement,
(a) the term “Ginnie Mae I Certificate” means a Ginnie Mae I MBS Certificate or a Ginnie Mae
Platinum Certificate backed by Ginnie Mae I MBS Certificates, and (b) the term “Ginnie Mae II
Certificate” means a Ginnie Mae II MBS Certificate or a Ginnie Mae Platinum Certificate backed
by Ginnie Mae II MBS Certificates.]
The Participations and the related HECMs are further described in the tables in the Terms
Sheet hereof and in Exhibit A to this Supplement. Exhibit A also sets forth information regarding
approximate loan ages of the related HECMs and weighted average information regarding various
characteristics of the HECMs relating to the Participations underlying the related HECM MBS.
[The Underlying Certificate[s] (Group [8])
The Group [8] Trust Asset[s] [is an] [are] Underlying Certificate[s] that represent[s] [a]
beneficial ownership interest[s] in separate trusts, the assets of which evidence direct or indirect
beneficial ownership interests in [a] certain Ginnie Mae Certificate[s]. [Each] [The] Underlying
Certificate[s] constitute[s] all or a portion of a class of a separate Series of certificates described
in the related Underlying Certificate Disclosure Document[s]. [Each] [The] Underlying Certificate
Disclosure Document[s] may be obtained from ginniemae.gov or the Information Agent as
described under "Available Information" in this Supplement. Investors are cautioned that material
changes in facts and circumstances may have occurred since the date of [each] [the] Underlying
Certificate Disclosure Document, including changes in prepayment rates, prevailing interest rates
and other economic factors, which may limit the usefulness of, and be directly contrary to the
assumptions used in preparing the information included in, such offering document. See
"Underlying Certificates" in the Base Offering Circular.
[Each] [The] Underlying Certificate provides for monthly distributions and is further
described in the tables contained in Exhibits D and E to this Supplement. The tables also set forth
information regarding approximate weighted average HECM age and gross coupon of the HECMs
underlying [each] [the] Underlying Certificate.]
S-28
VII-2-28
The Participations and the HECMs
The Participations and the related HECMs underlying the [Group 1 through 7] Trust Assets
are expected to have, on a weighted average basis, the characteristics set forth in Exhibit A and
the general characteristics described in the Base Offering Circular and the HECM MBS Disclosure
Documents. [The Participations and the related HECMs underlying [each] [the] Underlying
Certificate[s] are expected to have, on a weighted average basis, the characteristics set forth in
Exhibits D and E to this supplement.] The Participations are related to interests in advances made
to borrowers and related amounts in respect of first lien, single-family, [fixed rate] [and]
[adjustable rate] residential HECM loans insured by the Federal Housing Administration. See
"The Ginnie Mae Certificates — General" in the Base Offering Circular.
HECM borrowers may choose from various payment plans, which may be limited or
influenced by the characteristics of their particular HECM. These characteristics include, among
other things, the value of the mortgaged property, the amount disbursed to the HECM borrower at
closing, the age of the HECM borrower and in certain cases the age of any non-borrowing spouse,
and the type of interest rate selected by the HECM borrower at closing. HECM borrowers may
have the ability to change to another available payment plan at any time as long as the change
complies with FHA requirements. The "single disbursement lump sum" payment plan allows a
single draw at closing of up to a specified percentage of the principal limit of the HECM plus
subsequent disbursements after closing for set-asides. The "tenure" payment plan guarantees that
the borrower will receive equal monthly payments for so long as the property remains the
borrower's principal residence. The "term" payment plan guarantees that the borrower will receive
monthly payments for a fixed term of months as selected by the borrower. The "line of credit"
payment plan allows the borrower to draw up to the available line of credit and in amounts of the
borrower's choosing. The "modified tenure" payment plan allows the borrower to set aside a
portion of loan proceeds as a line of credit and receive the remaining balance in the form of equal
monthly payments. The "modified term" payment plan allows the borrower to set aside a portion
of the loan proceeds as a line of credit and receive the remaining balance as equal monthly
payments for a fixed period of time selected by the borrower. Each payment plan is designed so
that no repayments of principal or interest are required until a Maturity Event occurs, which may
be deferred in certain circumstances. Any HECM may be prepaid in whole or in part at any time
without penalty under each of the payment plans. See "Risk Factors — HECM borrowers may
choose from various payment plans, each of which has different prepayment characteristics that
may affect the weighted average lives and yields of the securities" in this Supplement.
[Each monthly adjustable rate HECM MBS is backed by Participations related to
adjustable rate HECMs with interest rates that adjust (i) on a monthly basis, (ii) in the month
immediately following the issuance of the related HECM MBS and (iii) on the same interest rate
adjustment date equal to the first day of the month.] [Each annual adjustable rate HECM MBS is
backed by Participations related to adjustable rate HECMs with interest rates that adjust (i) on an
annual basis, (ii) within twelve (12) months following the issuance of the related HECM MBS and
(iii) notwithstanding anything to the contrary in the HECM MBS Disclosure Documents, on the
same or different interest rate adjustment dates.] [See ["Risk Factors — The [applicable] interest
rate ind[ex][ices] for the HECMs related to the participations underlying the [[sub][group [ ] and
[ ]] trust assets, may not equal the [applicable] interest rate ind[ex][ices] for the [[group [ ] and
[ ]] securities, which may impact, perhaps significantly, the amount of interest distributable to the
S-29
VII-2-29
[group [ ] [and [ ]]] securities" in this Supplement] [and] ["Risk Factors — The mortgage interest
rate [index][indices] for the HECMs related to the participations directly or indirectly underlying
the [group ] trust assets [(and the interest rate [index][indices] for the underlying certificates
included in trust asset [sub]group[s] [
])] [is][are] different than the interest rate
[index][indices] for the related securities, which may impact, perhaps significantly, the amount of
interest distributable to the securities after any applicable initial fixed rate period of the related
HECMs" in this Supplement].]
Specific information regarding the individual characteristics of the Participations and the
related HECMs is not available. For purposes of this Supplement, certain assumptions have been
made regarding the characteristics of the Participations and the related HECMs. However, the
actual characteristics of many of the Participations and the related HECMs will differ from the
characteristics assumed, perhaps significantly. This will be the case even if the weighted average
characteristics of the Participations and the related HECMs are the same as the assumed
characteristics. Small differences in the characteristics of the Participations and the related
HECMs can have a significant effect on the Weighted Average Lives and yields of the Securities.
See "Terms Sheet — Assumed Characteristics of the HECMs and the Participations underlying
the [Group [1 through 7]] Trust Assets," ["Terms Sheet — Assumed Characteristics of the HECMs
and the Participations underlying the Group [8] Underlying Certificate[s]," "Risk Factors,"
"Yield, Maturity and Prepayment Considerations" and Exhibit[s] A [and E] in this Supplement.
The Trustee Fee
The Sponsor will contribute certain Ginnie Mae Certificates in respect of the Trustee Fee.
On each Distribution Date, the Trustee will retain all principal and interest distributions received
on such Ginnie Mae Certificates in payment of the Trustee Fee.
GINNIE MAE GUARANTY
The Government National Mortgage Association ("Ginnie Mae"), a wholly-owned
corporate instrumentality of the United States of America within HUD, guarantees the timely
payment of principal and interest on the Securities. The General Counsel of HUD has provided
an opinion to the effect that Ginnie Mae has the authority to guarantee multiclass securities and
that Ginnie Mae guaranties will constitute general obligations of the United States, for which the
full faith and credit of the United States is pledged. See "Ginnie Mae Guaranty" in the Base
Offering Circular.
DESCRIPTION OF THE SECURITIES
General
The description of the Securities contained in this Supplement is not complete and is
subject to, and is qualified in its entirety by reference to, all of the provisions of the Trust
Agreement. See "Description of the Securities" in the Base Offering Circular.
S-30
VII-2-30
Form of Securities
Each Class of Securities other than the Residual Securities initially will be issued and
maintained, and may be transferred only on the Fedwire Book-Entry System. Beneficial Owners
of Book-Entry Securities will ordinarily hold these Securities through one or more financial
intermediaries, such as banks, brokerage firms and securities clearing organizations that are
eligible to maintain book-entry accounts on the Fedwire Book-Entry System. By request
accompanied by the payment of a transfer fee of $25,000 per Certificated Security to be issued, a
Beneficial Owner may receive a Regular Security in certificated form.
The Residual Securities will not be issued in book-entry form but will be issued in fully
registered, certificated form and may be transferred or exchanged, subject to the transfer
restrictions applicable to Residual Securities set forth in the Trust Agreement, at the Corporate
Trust Office of the Trustee. See "Description of the Securities — Forms of Securities; Book-Entry
Procedures" in the Base Offering Circular.
Each Regular [and MX] Class will be issued in minimum dollar denominations of initial
principal or notional balance of $100,000 [and integral multiples of $1 in excess of $100,000].
Distributions
Distributions on the Securities will be made on each Distribution Date as specified under
"Terms Sheet — Distribution Date" in this Supplement. On each Distribution Date for a Security,
or in the case of the Certificated Securities, on the first Business Day after the related Distribution
Date, the [applicable] Available Distribution Amount will be distributed to the related Holders of
record as of the related Record Date. Beneficial Owners of Book-Entry Securities will receive
distributions through credits to accounts maintained for their benefit on the books and records of
the appropriate financial intermediaries. Holders of Certificated Securities will receive
distributions by check or, subject to the restrictions set forth in the Base Offering Circular, by wire
transfer. See "Description of the Securities — Distributions" and "— Method of Distributions" in
the Base Offering Circular.
Interest Distributions
The Interest Distribution Amount will be distributed or accrued as described under "Terms
Sheet — Distributions" in this Supplement.
•
Interest will be calculated on the basis of a 360-day year consisting of twelve 30-day
months.
•
Interest distributable or accrued on any Class for any Distribution Date will consist of
30 days' interest on its Class Principal Balance (or Class Notional Balance) as of the
related Record Date.
Categories of Classes
For purposes of interest distributions, the Classes will be categorized as shown under
"Interest Type" on the front cover of this Supplement [and on Schedule I to this Supplement]. The
S-31
VII-2-31
abbreviations used in this Supplement to describe the interest entitlements of the Classes are
explained under "Class Types" in Appendix I to the Base Offering Circular.
Accrual Period
[The Accrual Period for each Regular [and MX] Class is the calendar month preceding the
related Distribution Date.]
[The Accrual Period for each Regular [and MX] Class is set forth in the table below:
Class
[Fixed Rate] [and]
[Delay] Class[es] [and]
[Class[es] [ ] [and [ ]]
Accrual Period
The calendar month preceding the related Distribution Date
[Floating Rate] [and]
Interest Only Classes
[and] [Class[es] [ ] [and
[ ]]
From the 20th day of the month preceding the month of the related
Distribution Date through the 19th day of the month of that
Distribution Date
[Fixed Rate Class[es]
[The][Each] Fixed Rate Class will bear interest at the per annum Interest Rate shown on
the front cover of this Supplement [or on Schedule I to this Supplement]. ]
[Floating Rate Class[es]
[NOTE TO TRUST COUNSEL: For Floating Rate Classes whose Interest Rates are
based on 30-day Average SOFR: [[Each of] [Class[es] [ ] [and] [ ]] [The Floating Rate
Classes[es]] will bear interest as shown under "Terms Sheet — Interest Rates" in this Supplement.
The Interest Rate for [[each of] Class[es] [ ] and [ ]] [the Floating Rate Class[es]] will be based
on 30-day Average SOFR. The Trustee or its agent will determine 30-day Average SOFR as
described under "Description of the Securities — Interest Rate Indices — Determination of 30day Average SOFR" in the Base Offering Circular.
If 30-day Average SOFR ceases to be available or is no longer representative, a
replacement rate will be selected, as described under "Description of the Securities — Interest Rate
Indices — Benchmark Replacement" in the Base Offering Circular.]
[NOTE TO TRUST COUNSEL: For Floating Rate Classes whose Interest Rates are
based on One-Month CME Term SOFR: [[Each of] Class[es] [ ] and [ ]] [The Floating Rate
Class[es]] will bear interest as shown under "Terms Sheet — Interest Rates" in this Supplement.
The Interest Rates for [[each of] Class[es] [ ] and [ ]] [the Floating Rate Class[es]] will be
based on One-Month CME Term SOFR. The Trustee or its agent will determine One-Month CME
Term SOFR as described under "Description of the Securities — Interest Rate Indices —
Determination of CME Term SOFR" in the Base Offering Circular.] [NOTE TO TRUST
COUNSEL: Do not include for Fixed Rate Trust Assets or adjustable rate Trust Assets with
Interest Rates based on an Index that differs from the Index on the related Securities being issued:
S-32
VII-2-32
[[In the case of the Group [ ] and [ ] Securities,] [The] [the] Trustee or its agent may use different
values of One-Month CME Term SOFR than those that are used for the related HECMs, which
relate to the Participations underlying the related HECM MBS. See "Risk Factors — The
[applicable] interest rate ind[ex][ices] for the HECMs related to the participations underlying the
[[sub][group [ ] and [ ]] trust assets, may not equal the [applicable] interest rate ind[ex][ices] for
the [[group [ ] and [ ]] securities, which may impact, perhaps significantly, the amount of interest
distributable to the [group [ ] [and [ ]]] securities" in this Supplement.]
[NOTE TO TRUST COUNSEL: For Floating Rate Classes whose Interest Rates are
based on One-Year CME Term SOFR: [[Each of] Class[es] [ ] and [ ]] [The Floating Rate
Class[es]] will bear interest as shown under "Terms Sheet — Interest Rates" in this Supplement.
The Interest Rates for [[each of] Class[es] [ ] and [ ]] [the Floating Rate Class[es]] will be
based on One-Year CME Term SOFR and will adjust annually. The Trustee or its agent will
determine One-Year CME Term SOFR as described under "Description of the Securities —
Interest Rate Indices — Determination of CME Term SOFR" in the Base Offering Circular. [In
the case of the Group [ ] and [ ] Securities,] [The] [the] Trustee or its agent may use different
values of One-Year CME Term SOFR than those that are used for the related HECMs, which relate
to the Participations underlying the related HECM MBS. See "Risk Factors — The [applicable]
interest rate ind[ex][ices] for the HECMs related to the participations underlying the [[sub][group
[ ] and [ ]] trust assets, may not equal the [applicable] interest rate ind[ex][ices] for the [[group
[ ] and [ ]] securities, which may impact, perhaps significantly, the amount of interest distributable
to the [group [ ] [and [ ]]] securities" in this Supplement.]
If CME Term SOFR ceases to be available or is no longer representative, a replacement
rate will be selected, as described under "Description of the Securities — Interest Rate Indices —
Benchmark Replacement" in the Base Offering Circular.]
[NOTE TO TRUST COUNSEL: For Floating Rate Classes whose Interest Rates are
based on One-Year CMT: [[Each of] [Class[es] [ ] [and] [ ]] [The Floating Rate Classes[es]]
will bear interest as shown under "Terms Sheet — Interest Rates" in this Supplement. The Interest
Rate for [[each of] Class[es] [ ] and [ ]] [the Floating Rate Class[es]] will be based on OneYear CMT. One-Year CMT will equal the weekly average yield, expressed as a per annum rate,
on U.S. Treasury securities adjusted to a constant maturity of one year as published by the Federal
Reserve Board in the most recent edition of Federal Reserve Board Statistical Release No. H.15
(519) approximately thirty days prior to the first day of the month in which the related Accrual
Period begins. If such rate becomes unavailable, then a replacement rate will be selected, as
described under "Description of the Securities — Interest Rate Indices — Benchmark
Replacement" in the Base Offering Circular. The Trustee or its agent may use different values of
One-Year CMT than those that are used for the related HECMs, which relate to the Participations
underlying the related HECM MBS. See "Risk Factors — The [applicable] interest rate
ind[ex][ices] for the HECMs related to the participations underlying the [[sub][group [ ] and [ ]]
trust assets, may not equal the [applicable] interest rate ind[ex][ices] for the [[group [ ] and [ ]]
securities, which may impact, perhaps significantly, the amount of interest distributable to the
[group [ ] [and [ ]]] securities" in this Supplement.
For additional information regarding the manner in which the Trustee determines OneYear CMT and calculates the Interest Rate for [[each of] Class[es][ ] and [ ]] [the Floating Rate
S-33
VII-2-33
Class[es], see "Description of the Securities — Interest Rate Indices — Determination of the
Treasury Index" in the Base Offering Circular.]
[HECM MBS Weighted Average Coupon Class[es]
[The][Each] HECM MBS Weighted Average Coupon Class will bear interest as shown
under "Terms Sheet — Interest Rates" in this Supplement.
The interest that will be distributed or accrued, as applicable, on [the][each] HECM MBS
Weighted Average Coupon Class will be limited by the interest that is distributed or accrued in
respect of the [related] Trust Assets. [With respect to the Participations underlying the [Group [
] [and [ ]] Trust Assets, see "Risk Factors — The [applicable] interest rate ind[ex][ices] for the
HECMs related to the participations underlying the [[sub][group [ ] and [ ]] trust assets, may not
equal the [applicable] interest rate ind[ex][ices] for the [[group [ ] and [ ]] securities, which may
impact, perhaps significantly, the amount of interest distributable to the [group [ ] [and [ ]]]
securities"[,] in this Supplement[,] [and] "Risk Factors — Adjustable rate HECMs are subject to
limitations on interest rate adjustments, which may limit the amount of interest payable in respect
of the related HECM MBS and may limit the WACR on the related HECM MBS and the interest
rates on the [group [ ] and [ ]]] securities" in this Supplement [and "Risk Factors — The mortgage
interest rate [index][indices] for the HECMs related to the participations directly or indirectly
underlying the [group ] trust assets [(and the interest rate [index][indices] for the underlying
certificates included in trust asset [sub]group[s] [ ])] [is][are] different than the interest rate
[index][indices] for the related securities, which may impact, perhaps significantly, the amount of
interest distributable to the securities after any applicable initial fixed rate period of the related
HECMs" in this Supplement.][With respect to the Participations underlying the Group [ ] Trust
Assets, see ["Risk Factors — The WACR of the [[sub]group [ ]] trust assets may limit the amount
of interest distributed to or accrued on the [related] floating rate and notional class[es]" ][“Risk
Factors - The Underlying Certificate WACR of the [sub]group [ ][,] [and] [ ] [and] [ ] trust
asset[s] may limit the amount of interest distributed to or accrued on the [related] floating rate
and notional classes”] in this Supplement.]]
[The Trustee's [determination[s] of [One-Month CME Term SOFR][,] [and] [One-Year
CME Term SOFR][,] [and] [30-day Average SOFR] [and One-Year CMT] and its] calculation[s]
of the Interest Rates will be final except in the case of clear error. Investors can obtain [[OneMonth CME Term SOFR][,] [and] [One-Year CME Term SOFR][,] [and] [30-day Average SOFR]
[and One-Year CMT] levels and] Interest Rates for the current and preceding Accrual Periods from
ginniemae.gov or by calling the Information Agent at (800) 234-GNMA.]
HECM MBS Accrual Class[es]
[NOTE TO TRUST COUNSEL: Do not list MX Accrual Classes: [Each of] Class [ ]
[and Class [ ]] is a HECM MBS Accrual Class. Interest will accrue on [the] [each] HECM MBS
Accrual Class and be distributed as described under "HECM MBS Accrual Class" in Appendix II
to the Base Offering Circular.
S-34
VII-2-34
Deferred Interest Amount[s]
Any interest accrued and unpaid on [a] [the] Notional Class during the Accrual Period for
any Distribution Date that is not distributed because of an insufficiency in the [related] Available
Distribution Amount for such Distribution Date increases the [related] Deferred Interest Amount
for [such] [the] Notional Class. Any such amounts distributable to the Holders of [a] [the] Notional
Class will be paid no later than the Final Distribution Date of [such] [the] Notional Class.
Principal Distributions
Amounts distributable in respect of principal will be distributed to the Holders entitled
thereto as described under "Terms Sheet — Distributions" in this Supplement. Investors can
calculate the amount of principal to be distributed with respect to any Distribution Date by using
the Class Factors published in the preceding and current months. See "— Class Factors" below.
Categories of Classes
For purposes of principal distributions, the Classes will be categorized as shown under
"Principal Type" on the front cover of this Supplement [and on Schedule I to this Supplement].
The abbreviations used in this Supplement to describe the principal entitlements of the Classes are
explained under "Class Types" in Appendix I to the Base Offering Circular.
Notional Class[es]
The Notional Class[es] will not receive principal distributions based on [its][their] Class
Notional Balance[s]. For convenience in describing interest distributions, the Notional Class[es]
will have the original Class Notional Balance[s] shown on the front cover of this Supplement [and
on Schedule I to this Supplement]. The Class Notional Balance[s] will be reduced or increased as
shown under "Terms Sheet — Notional Class[es]" in this Supplement.
Residual Securities
The [Class RR] [Residual] Securities will represent the beneficial ownership of the
Residual Interest in the [related] Issuing REMIC and the beneficial ownership of the Residual
Interest in the [related] Pooling REMIC, as described in "Certain United States Federal Income
Tax Consequences" in the Base Offering Circular. The [Class RR] [Residual] Securities have no
Class Principal Balance and do not accrue interest. The [Class RR] [Residual] Securities will be
entitled to receive the proceeds of the disposition of any assets remaining in the [related] Trust
REMICs after the Class Principal Balance or Class Notional Balance of each Class of Regular
Securities [in the related Security [Group] [or] [Groups]] has been reduced to zero. However, any
remaining proceeds are not likely to be significant. The Residual Securities may not be transferred
to a Plan Investor, a Non-U.S. Person or a Disqualified Organization.
Class Factors
The Trustee will calculate and make available for each Class of Securities, no later than
the day preceding the Distribution Date, the factor (carried out to eight decimal places) that when
multiplied by the Original Class Principal Balance (or original Class Notional Balance) of that
S-35
VII-2-35
Class, determines the Class Principal Balance (or Class Notional Balance) after giving effect to
the distribution of principal to be made on the Securities (and any addition to the Class Principal
Balance of a HECM MBS Accrual Class [NOTE TO TRUST COUNSEL: For MX Classes where
related REMIC Classes are a mix of NTL and P&I: and, in the case of the Class [MX] Securities,
any addition resulting from an increase in the Class [RELATED REMIC NTL] Deferred Interest
Amount) or any addition to or reduction of Class Notional Balance on that Distribution Date (each,
a "Class Factor").
•
The Class Factor for any Class of Securities for each month following the issuance of
the Securities will reflect its remaining Class Principal Balance (or Class Notional
Balance) after giving effect to any principal distribution (or addition to principal) to be
made or any addition to or reduction of Class Notional Balance on the Distribution
Date occurring in that month.
•
The Class Factor for each Class for the month of issuance is 1.00000000.
•
[The Class Factors for the MX Class[es] and the Classes of REMIC Securities that [are]
[is] exchangeable for the MX Class[es] will be calculated assuming that the maximum
possible amount of each Class is outstanding at all times, regardless of any exchanges
that may occur.]
•
Investors may obtain current Class Factors on ginniemae.gov.
See "Description of the Securities — Distributions" in the Base Offering Circular.
Termination
The Trustee, at its option, may purchase or cause the sale of the Trust Assets and thereby
terminate the Trust on any Distribution Date on which the aggregate of the Class Principal
Balances of the Securities is less than 1% of the aggregate Original Class Principal Balances of
the Securities. On any Distribution Date upon the Trustee's determination that the REMIC status
of any Trust REMIC has been lost or that a substantial risk exists that this status will be lost for
the then current taxable year, the Trustee will terminate [the Trust] [such Trust REMIC and any
related Trust REMIC] and retire the [related] Securities. [For these purposes, the Trust REMICs
and the Securities with corresponding numerical designations are related as follows:
Trust REMICs
Group [1] Issuing and Pooling REMICs
[Group [2] Issuing and Pooling REMICs
[Group [3] Issuing and Pooling REMICs
[Group [4] Issuing and Pooling REMICs
[Group [5] Issuing and Pooling REMICs
Related Securities
Group [1] Securities
Group [2] Securities]
Group [3] Securities]
Group [4] Securities]
Group [5] Securities]]
Upon any termination of the Trust [(or one or more related Trust REMICs)], the Holder of
any [related] outstanding Security (other than a Residual or Notional Class Security) will be
entitled to receive that Holder's allocable share of the Class Principal Balance of that Class plus
any accrued and unpaid interest thereon at the applicable Interest Rate, and any Holder of any
S-36
VII-2-36
[related] outstanding Notional Class Security will be entitled to receive that Holder's allocable
share of any accrued and unpaid interest thereon at the applicable Interest Rate (including any
[related] Deferred Interest Amount). The Residual Holders will be entitled to their pro rata share
of any assets remaining in the [related] Trust REMICs after payment in full of the amounts
described in the foregoing sentence. However, any remaining assets are not likely to be significant.
[NOTE TO TRUST COUNSEL: Include the following language when there is a separately
collapsible Security Group:
With respect to each of Security Groups [ ], [ ], and [ ], a Holder of all of the outstanding
Regular Securities of any such Security Group and the related Class of Residual Securities will
have the right to purchase the related Trust Assets upon three Business Days' notice (the "Notice
Period"). The purchase will be for cash in an amount equal to (A)(i) the aggregate remaining
principal balance[, in the case of the Group[s] [1 through 7] Securities, or the Class [ ] Deferred
Interest Amount [(as that term is defined in the Underlying Certificate Disclosure Document)], in
the case of the Group [8] Securities,]] 20 of the Trust Assets of such Security Group, but in no event
less than the aggregate outstanding principal amount, if any, plus Deferred Interest Amount, if any,
of the Securities of such Security Group, plus (ii) accrued interest on the Securities of such Security
Group, less (B) amounts on deposit in the related Trust REMIC or Trust REMICs, for distribution
on the Securities of such Security Group, plus (C) a $5,000 termination fee payable to the Trustee
in connection with each Security Group to be terminated. After the Notice Period, and upon such
purchase, the Trustee will terminate the related Trust REMIC or Trust REMICs. Upon such
termination, the Trustee will distribute the cash proceeds of the sale of the related Trust Assets to
the Holder of the related Securities (which distribution may be offset against amounts due on the
sale of such assets), will cancel the Securities of the related Security Group and cause the removal
from the Book-Entry Depository Account of all Classes of the related Security Group, will cancel
the related Class of Residual Securities, and will credit the remaining Trust Assets in the related
Security Group to the account of the surrendering Holder.
Notwithstanding anything to the contrary contained herein, no such termination will be
allowed unless the Trustee and Ginnie Mae are provided, at no cost to either the Trustee or Ginnie
Mae, an Opinion of Counsel, acceptable to the Trustee and Ginnie Mae, to the effect that such
termination constitutes a "qualified liquidation" under the REMIC Provisions, including Section
860F(a)(4) of the Code, and such termination will not result in a disqualification of any Trust
REMIC that is not terminated at such time or the imposition of any "prohibited transactions" or
"contributions" tax under the REMIC Provisions on any Trust REMIC that is not terminated at
such time.]
[Modification and Exchange
All or a portion of the Class[es] of REMIC Securities specified on the front cover may be
exchanged for a proportionate interest in the related MX [Class] [or] [Classes] shown on
Schedule I to this Supplement. Similarly, all or a portion of the related MX Class may be
20
NOTE TO TRUST COUNSEL: Include when Underlying Certificate is an Interest Only Class.
S-37
VII-2-37
exchanged for proportionate interests in the related [Class] [or] [Classes] of REMIC Securities.
This process may occur repeatedly.
Each exchange may be effected only in proportions that result in the principal and interest
entitlements of the Securities received being equal to the entitlements of the Securities surrendered.
[Class[es] [ ] and [ ] [is a][are] HECM MBS Weighted Average Coupon Class[es] that
will accrue interest as described under "Terms Sheet — Interest Rates" in this Supplement. In the
event that the Interest Rate of [any] such MX Class will equal or exceed 1,200% per annum for
any Accrual Period, the Trustee will, prior to the close of business on the last Business Day of the
calendar month immediately preceding the related Distribution Date, effect a mandatory exchange
of that MX Class for its related REMIC Securities. Thereafter, no further exchanges of such
REMIC Securities will be permitted.]
A Beneficial Owner proposing to effect an exchange must notify the Trustee through the
Beneficial Owner's Book-Entry Depository participant. This notice must be received by the
Trustee not later than two Business Days before the proposed exchange date. The exchange date
can be any Business Day other than the last Business Day of the month. The notice must contain
the outstanding [principal] [and] [or] [notional] balance[s] of the Securities to be included in the
exchange and the proposed exchange date. The notice is required to be delivered to the Trustee
by email to [
] or in writing at its Corporate Trust Office at [address], Attention:
20[__]-H[__].
Ginnie Mae REMIC Program 20[
]-H[ ]. The Trustee may be contacted by telephone at ([ ])
[ ]- [ ] and by fax at ([ ]) [ ]- [ ].
A fee will be payable to the Trustee in connection with each exchange equal to 1/32 of 1%
of the outstanding [principal balance] [[or] [notional balance] of the Securities surrendered for
exchange (but not less than $2,000 or more than $25,000)[; provided, however,] that no fee will
be payable in respect of a mandatory exchange described above;] [and provided further,] that no
fee will be payable in respect of an interest only security unless all securities involved in the
exchange are interest only securities]. [If the notional balance of the interest only securities
surrendered exceeds that of the interest only securities received, the fee will be based on the latter.]
The fee must be paid concurrently with the exchange.
The first distribution on a REMIC Security or an MX Security received in an exchange will
be made on the Distribution Date in the month following the month of the exchange. The
distribution will be made to the Holder of record as of the Record Date in the month of exchange.
See "Description of the Securities — Modification and Exchange" in the Base Offering
Circular.]
YIELD, MATURITY AND PREPAYMENT CONSIDERATIONS
General
The prepayment experience of the HECMs will affect the Weighted Average Lives of and
the yields realized by investors in the related Securities.
•
The rate of principal payments (including prepayments or partial payments) of the
S-38
VII-2-38
HECMs relating to the Participations underlying the Securities [and the Underlying
Certificate[s]] depends on a variety of economic, geographic, social, and other factors,
including prevailing market interest rates, home values, HECM borrower mortality,
qualifying non-borrowing spouse mortality, divorce rates, changes in the value of the
mortgaged property, the HECM borrower's ability to draw down additional funds
without refinancing, FHA guidelines regarding HECMs, servicing decisions and court
imposed limits on the rights and remedies available to a Ginnie Mae Issuer under the
HECMs, and will affect the Weighted Average Lives and yields realized by investors
in the related Securities. HECMs may respond differently than traditional forward
mortgage loans to the factors that influence prepayment.
With respect to the related Trust Assets, the occurrence of any of the following events with
respect to a HECM related to the Participations underlying the related HECM MBS (each a
"Maturity Event") will, subject to deferral in certain circumstances, result in the holders of the
Securities being entitled to a distribution of principal:
•
if a borrower dies and the property is not the principal residence of at least one surviving
borrower,
•
if a borrower conveys all of his or her title in the mortgaged property and no other
borrower retains title to the mortgaged property,
•
if the mortgaged property ceases to be the principal residence of a borrower for reasons
other than death and the mortgaged property is not the principal residence of at least
one surviving borrower,
•
if a borrower fails to occupy the mortgaged property for a period of longer than 12
consecutive months because of physical or mental illness and the mortgaged property
is not the principal residence of at least one other borrower, or
•
if a borrower fails to perform any of its obligations under the HECM (for example, the
failure of the borrower to make certain agreed upon repairs to the mortgaged property
or the failure of the borrower to pay taxes and hazard insurance premiums).
Some HECMs may provide for the deferral of a Maturity Event when the last surviving
borrower dies with a non-borrowing spouse who satisfies FHA qualifying attributes and ongoing
requirements for deferral. This deferral ceases when the non-borrowing spouse fails to qualify or
satisfy FHA requirements for deferral, at which point the Maturity Event is no longer deferred and
the HECM will become due and payable in accordance with FHA procedures.
Generally, a HECM is not repaid immediately upon the occurrence of a Maturity Event,
but continues to accrue interest until the liquidation of the related mortgaged property and the
repayment of the HECM or the receipt of insurance proceeds from FHA. Any resulting shortfall
to investors in the related Securities with respect to any Participations in the related HECM will
be covered by Ginnie Mae pursuant to its guaranty of the Securities.
S-39
VII-2-39
A Ginnie Mae Issuer is obligated to purchase all Participations related to a HECM when
the outstanding principal amount of the related HECM is equal to or greater than 98% of the
"Maximum Claim Amount," and a Ginnie Mae Issuer has the option to purchase all Participations
related to a HECM to the extent that any borrower's request for an additional advance in respect
of any HECM, if funded, together with the outstanding principal amount of the related HECM is
equal to or greater than 98% of the "Maximum Claim Amount" or when a HECM becomes, and
continues to be, due and payable in accordance with its terms, as applicable (any such purchase
referred to herein as a "Ginnie Mae Issuer Purchase Event"). In connection with such repurchase,
the Ginnie Mae Issuer will pay an amount (the "Release Price") equal to the outstanding principal
amount of all of the Participations related to such HECMs, and Ginnie Mae will relinquish all
right, title and interest it has in the HECMs and the related Participations. With respect to each
Participation, the "outstanding principal amount" of such Participation is the original principal
amount of such Participation as of the related Issue Date of the related HECM MBS, increased by
the Accrued Interest with respect to such Participation and decreased by any payments made in
respect of such Participation. For purposes of determining the Release Price, the "Accrued
Interest" with respect to any Participation is the aggregate interest accrued, compounded on a
monthly basis, allocable to the Participation at the related Participation Interest Rate for each
month (in each case, after taking into account any payments made in reduction of such
Participation) from and including the Issue Date through the last day of the reporting month (as
such term is defined in the Ginnie Mae guaranty agreement for the related HECM MBS) in which
the Participation is to be purchased. The Participations relating to the HECM must be purchased
by the Ginnie Mae Issuer at the end of the reporting month in which the outstanding principal
balance of the HECM equals or exceeds 98% of the Maximum Claim Amount for such HECM.
The Release Price will be passed through to the related securityholders on the Distribution Date
following the month in which such Ginnie Mae Issuer Purchase Event occurs.
[NOTE TO TRUST COUNSEL: For ARM HECM MBS Index, not for HREMIC
Security Index: 21 Higher levels of [One-Month Adjusted CME Term SOFR] [or] [One-Year
Adjusted CME Term SOFR] [or] [One-Year CMT][, as applicable,] and] [Additional] [additional]
draws on HECMs will increase the rate at which the related HECMs will reach their Maximum
Claim Amounts. Any payment in respect of the related Securities resulting from a Ginnie Mae
Issuer Purchase Event will reduce the Weighted Average Lives of such Securities and will affect,
perhaps significantly, the yields on such Securities.]
The occurrence of voluntary prepayments by a borrower, Maturity Events and Ginnie Mae
Issuer Purchase Events will accelerate the distribution of principal of the Securities. It is uncertain
when any amounts might be paid on securities backed by Participations in HECMs because it is
uncertain (i) whether a HECM borrower will choose to prepay amounts advanced in whole or in
part, (ii) when any Maturity Event might occur and whether that Maturity Event will be deferred
and (iii) when any Ginnie Mae Issuer Purchase Event might occur. Investors in the Securities are
urged to review the discussion under "Risk Factors — It is uncertain when payments will be made
in respect of securities backed by HECM MBS" in this Supplement and also the HECM MBS
Disclosure Documents.
21
[NOTE TO TRUST COUNSEL: In the event mortgage rates adjust based on some other index, revise language
accordingly.]
S-40
VII-2-40
Under certain circumstances, the Trustee has the option to purchase the Trust Assets,
thereby effecting early retirement of the Securities. See "Description of the Securities —
Termination" in this Supplement.
[Investors in the Group [8] Securities are urged to review the discussion under "Risk
Factors — The rate of reduction or increase in the [principal] [notional] balance[s] of the
underlying certificate[s] will directly affect the rate of reduction or increase in the [principal]
[notional] balance of the Group [8] securities" in this Supplement.]
Final Distribution Date
The Final Distribution Date for each Class, which is set forth on the front cover of this
Supplement [or on Schedule I to this Supplement], is the latest date on which the related Class
Principal Balance or Class Notional Balance will be reduced to zero. In the case of [the][each]
Notional Class, the [related] Deferred Interest Amount will be reduced to zero no later than the
Final Distribution Date for such Notional Class.
•
The actual retirement of any Class may occur earlier than its Final Distribution Date.
•
According to the terms of the Ginnie Mae Guaranty, Ginnie Mae will guarantee
payment in full of the Class Principal Balance of each Class of Securities no later than
its Final Distribution Date.
Modeling Assumptions
The tables that follow have been prepared on the basis of the [characteristics of the
Underlying Certificate[s] and the] following assumptions (the "Modeling Assumptions"), among
others:
1. The HECMs and related Participations underlying the [Group 1 through 7] Trust Assets
have the assumed characteristics shown in Exhibit A [, and the HECMS and related Participations
underlying the Group [8] Trust Asset[s] have the assumed characteristics shown in Exhibit E].
2. The HECMs prepay at the constant percentages of the prepayment curve (described
below and in Exhibit B) shown in the related table.
[3. Draw activity occurs on the first day of the month and payments on the HECMs occur
on the last day of the month, whether or not a Business Day, commencing in [
] 20[ ]. ]
[4.] Distributions, if any, on the Securities are always received on the 20th day of the
month, whether or not a Business Day, commencing in [
] 20[ ].
[5.] A termination of the Trust [or any Trust REMIC] [or [the] [any] Underlying Trust[s]]
does not occur.
[6.] The Closing Date for the Securities is [
S-41
], 20[ ].
VII-2-41
[7.] No expenses or fees are paid by the Trust other than the Trustee Fee, which is paid as
described under "The Trust Assets — The Trustee Fee" in this Supplement.
[8.] [Distributions on the Underlying Certificate[s] are made as described in the
Underlying Certificate Disclosure Document[s].]
[9.] [HECM borrowers who have the ability to do so draw at the annualized draw rate
determined in accordance with the constant percentages of the draw curve shown in Exhibit C (the
"Draw Rate"). The Draw Rate (converted to an equivalent monthly factor) is applied to the
Maximum Claim Amount. [As of the Closing Date, the HECMs [related to the [Group [ ]] [and
Subgroup [ ]] Trust Assets are fully drawn.]]
[10.] If a mandatory Ginnie Mae Issuer Purchase Event occurs with respect to a HECM,
the purchase of the related Participation timely occurs. No optional Ginnie Mae Issuer Purchase
Events occur.
[11. NOTE TO TRUST COUNSEL: For adjustable rate securities: The initial Interest
Rate[s] on the Group [ ] [and [ ]] Securities will be based on the initial rate[s] as shown under
"Terms Sheet – Interest Rates" in this Supplement; however, the interest rate on the [Group [ ]
[and [ ]]] adjustable rate HECMs for the first Distribution Date is based on the information set
forth in Exhibit A. The Interest Rates on the Group [ ] [[ ] and [ ]] Floating Rate Securities will
adjust [monthly] [annually at the beginning of the Accrual Period related to the Distribution Date
in [NOTE TO TRUST COUNSEL: INSERT MONTH AND YEAR OF DISTRIBUTION
DATE RELATED TO THE FIRST INTEREST RATE RESET]. [For purposes of the [Group [ ]
[and [ ]]] decrement tables, in all periods on or subsequent to the applicable Approximate Weighted
Average Next Rate Reset Month shown in Exhibit A, the constant value shown of the applicable
index shown in Exhibit A with respect to any such decrement table is used to calculate the interest
rate with respect to the Group [ ] [and [ ]] HECMs, while on all Distribution Dates occurring after
the first Distribution Date, the constant value shown of the applicable index shown in the Terms
Sheet with respect to any such decrement table is used to calculate the interest rate with respect to
the applicable Class.]]
[12. NOTE TO TRUST COUNSEL: For Securities backed by One-Year Adjusted
CME Term SOFR collateral or One-Year CMT collateral that adjust on an annual basis: The
HECMs and the Participations underlying the Group [ ] Trust Assets [and, in the case of Pool[s]
[ ][,] [and] [ ][,] [and] [ ], the Group [ ] [and [ ] Trust Assets] each have annual interest rate
adjustment caps of [2]%. [NOTE TO TRUST COUNSEL: For Groups with adjustable rate
Trust Assets that adjust on a monthly basis: There are no [annual] [periodic] interest rate
adjustment caps on the HECMs and the Participations underlying the [Group [ ]] Trust Assets.]
[13.] The original term of the HECMs is 50 years. If a HECM remains outstanding after
its original term of 50 years, a mandatory Ginnie Mae Issuer Purchase Event occurs with respect
to such HECM.
[14.]
No borrower changes payment plans.
[15. Each Class is held from the Closing Date and is not exchanged in whole or in part[,
including that there is no mandatory exchange of Class [ ].]]
S-42
VII-2-42
[16.] Draws occur each month in respect of the Monthly Servicing Fee, if any, as set
forth on Exhibit A [or Exhibit E]. No draws occur in respect of any set asides for property charges
(such as taxes, hazard insurance, ground rents or assessments) or repairs.
[17. As of the Closing Date, for each Underlying Certificate with cumulative deferred
interest, such amount is as set forth on Exhibit D.]
[18.
Other or different assumptions, as applicable.]
When reading the tables and the related text, investors should bear in mind that the
Modeling Assumptions, like any other stated assumptions, are unlikely to be entirely consistent
with actual experience.
•
For example, most of the HECMs will not have the characteristics assumed, many
Distribution Dates will occur on a Business Day after the 20th of the month, draw
activity and prepayments, if any, will occur throughout the month, draws will occur in
respect of set asides for property charges and repairs, the Trustee may cause a
termination of the Trust as described under "Description of the Securities —
Termination" in this Supplement and [One-Month CME Term SOFR on the Group [ ]
[and] [ ] Securities may differ from [One-Month Adjusted CME Term SOFR][,] [or]
[One-Year Adjusted CME Term SOFR] [or One-Year CMT][, as applicable,] on the
related adjustable rate HECMs] [and] [One-Year CME Term SOFR on the Group [ ]
[and] [ ] Securities may differ from One-Year Adjusted CME Term SOFR on the
related adjustable rate HECMs] [and One-Year CMT on the Group [ ] Securities may
differ from One-Year CMT on the related adjustable rate HECMS].
•
In addition, distributions on the Securities are based on Certificate Factors and
Calculated Certificate Factors, as applicable, which may not reflect actual receipts on
the Trust Assets.
See "Description of the Securities — Distributions" in the Base Offering Circular.
Decrement Tables
Prepayments of mortgage loans are commonly measured by a prepayment standard or
model. The model used in this Supplement is based on a prepayment curve ("PPC") consisting of
a series of Constant Prepayment Rates ("CPRs"). CPR is the standard prepayment assumption
model of The Securities Industry and Financial Markets Association. CPR represents a constant
rate of prepayment on the HECMs each month relative to the then outstanding aggregate principal
balance of the HECMs for the life of those HECMs. See "Yield, Maturity and Prepayment
Considerations — Standard Prepayment Assumption Models" in the Base Offering Circular.
The PPC [and Draw Rates] are based on the [respective] percentage[s] in effect beginning
on each Distribution Date as indicated in Exhibit[s] B [and C].
The decrement tables set forth below are based on the assumption that the HECMs prepay
at the indicated percentages of PPC (the "PPC Prepayment Assumption Rates"). As used in the
tables, each of the PPC Prepayment Assumption Rates reflects a percentage of the 100% PPC
S-43
VII-2-43
assumed prepayment curve. The HECMs will not prepay at any of the PPC Prepayment
Assumption Rates, and the timing of changes in the rate of prepayments actually experienced
on the HECMs will not follow the pattern described for the PPC assumption.
The decrement tables set forth below illustrate the percentage of the Original Class
Principal Balance (or, in the case of a Notional Class, the original Class Notional Balance) that
would remain outstanding following the distribution made each specified month for each Regular
[or MX] Class, based on the assumptions that the related HECMs prepay at the PPC Prepayment
Assumption Rates set forth in such tables[, [One-Month CME Term SOFR][,][and] [One-Month
Adjusted CME Term SOFR][,][and] [One-Year CME Term SOFR] [,][and] [One-Year Adjusted
CME Term SOFR][,][and] [30-day Average SOFR] [and] [One-Year CMT][, as applicable,] [is]
[are] constant at the rates set forth in such tables] [and draws, if any, occur at the Draw Rates set
forth in Exhibit C]. The percentages set forth in the following decrement tables have been rounded
to the nearest whole percentage (including rounding down to zero).
The decrement tables also indicate the Weighted Average Life of each Class under each
PPC Prepayment Assumption Rate [and each indicated level of [One-Month CME Term SOFR][,]
[and] [One-Month Adjusted CME Term SOFR][,][and] [One-Year CME Term SOFR] [,][and]
[One-Year Adjusted CME Term SOFR][,][and] [30-day Average SOFR] [and] [One-Year CMT]
[, as applicable]. The Weighted Average Life of each Class is calculated by:
(a)
multiplying the net reduction, if any, of the Class Principal Balance (or the net
reduction of the Class Notional Balance, in the case of [a][the] Notional Class) from
one Distribution Date to the next Distribution Date by the number of years from the
date of issuance thereof to the related Distribution Date,
(b)
summing the results, and
(c)
dividing the sum by the aggregate amount of the assumed net reductions in principal
balance or notional amount, as applicable, referred to in clause (a).
The information shown for [the][each] Notional Class is for illustrative purposes only, as
a Notional Class is not entitled to distributions of principal based on its Class Notional Balance
and has no Weighted Average Life. The Weighted Average Life shown for [the][each] Notional
Class has been calculated on the assumption that a reduction in the Class Notional Balance thereof
is a distribution of principal and further does not factor in any entitlement to the applicable
Deferred Interest Amount. See the footnotes below related to the decrement tables for [the][each]
Notional Class.
The Weighted Average Lives are likely to vary, perhaps significantly, from those set
forth in the tables below due to the differences between the actual characteristics of the
HECMs related to the Participations underlying the [related] Trust Assets and the Modeling
Assumptions.
S-44
VII-2-44
Percentages of Original Class Principal (or Class Notional) Balances
and Weighted Average Lives
[NOTE TO TRUST COUNSEL: Form decrement tables for groups with fixed rate or HWAC
classes and corresponding notional amount classes]
Security Group [ ]
PPC Prepayment Assumption Rates
Class [ ]
Class [ ][*]
Distribution Date
[0]% [75]% [100]% [125]% [150]% [0]%
[75]% [100]% [125]% [150]%
Initial Percent.....................
100
100
100
100
100
100
100
100
100
100
[month year] ......................
[month year] ......................
[month year] ......................
[month year] ......................
[month year] ......................
[month year] ......................
[month year] and thereafter
Weighted Average Life
(years) ...........................
[NOTE TO TRUST COUNSEL: For NTL classes]
*
The decrement table[s] for Class [ ] reflects only the Class [ ] Notional Balance at various rates of PPC. In addition to the current interest
accrual amount on the Class [ ] Notional Balance at the Class [ ] Interest Rate, Class [ ] is entitled to the Class [ ] Deferred Interest
Amount. No representation is made about the timing of distributions of the Class [ ] Deferred Interest Amount other than that such amount
will be paid no later than the Final Distribution Date for Class [ ]. ]
[NOTE TO TRUST COUNSEL: Form decrement tables for groups with floating rate classes
and corresponding notional amount classes]
PPC Prepayment Assumption Rates
Class [ ]
[[ ]% One-Month CME Term
Class [ ][*]
SOFR]
[[ ]% One-Month CME Term SOFR]
[[ ]% One-Month Adjusted CME
[[ ]% One-Month Adjusted CME Term
Term SOFR
SOFR
[[ ]% One-Year CME Term SOFR]
[[ ]% One-Year CME Term SOFR]
[[ ]% One-Year Adjusted CME
[[ ]% One-Year Adjusted CME Term
Term SOFR]
SOFR]
[[ ]% 30-day Average SOFR]
[[ ]% 30-day Average SOFR]
[[ ]% One-Year CMT]
[[ ]% One-Year CMT]
Distribution Date
[0]% [75]% [100]% [125]% [150]% [0]%
[75]% [100]% [125]% [150]%
Initial Percent.....................
100
100
100
100
100
100
100
100
100
100
[month year] ......................
[month year] ......................
[month year] ......................
[month year] ......................
[month year] ......................
[month year] ......................
[month year] and thereafter
Weighted Average Life
(years) ...........................
S-45
VII-2-45
[NOTE TO TRUST COUNSEL: For NTL classes]
*
The decrement table[s] for Class [ ] reflect only the Class [ ] Notional Balance at various rates of PPC and at various levels of [One-Month
CME Term SOFR][,][and] [One-Month Adjusted CME Term SOFR][,][and] [One-Year CME Term SOFR][,][and] [One-Year Adjusted CME
Term SOFR][,][and] [30-day Average SOFR] [and One-Year CMT]. In addition to the current interest accrual amount on the Class [ ]
Notional Balance at the Class [ ] Interest Rate, Class [ ] is entitled to the Class [ ] Deferred Interest Amount. No representation is made
about the timing of distributions of the Class [ ] Deferred Interest Amount other than that such amount will be paid no later than the Final
Distribution Date for Class [ ]. ]
[NOTE TO TRUST COUNSEL: Form decrement tables for MX Classes backed by REMIC
classes in separate security groups and based on floating rate index; place tables following the
decrement tables for the highest underlying group]
Security Group[s] [ ] and [ ]
PPC Prepayment Assumption Rates
Class [ ]
[[ ]% One-Month CME Term
Class [ ] [*]
SOFR]
[[ ]% One-Month CME Term SOFR]
[[ ]% One-Month Adjusted CME
[[ ]% One-Month Adjusted CME Term
Term SOFR
SOFR
[[ ]% One-Year CME Term SOFR]
[[ ]% One-Year CME Term SOFR]
[[ ]% One-Year Adjusted CME
[[ ]% One-Year Adjusted CME Term
Term SOFR]
SOFR]
[[ ]% 30-day Average SOFR]
[[ ]% 30-day Average SOFR]
[[ ]% One-Year CMT]
[[ ]% One-Year CMT]
Distribution Date
[0]% [75]% [100]% [125]% [150]% [0]%
[75]% [100]% [125]% [150]%
Initial Percent.....................
100
100
100
100
100
100
100
100
100
100
[month year] ......................
[month year] ......................
[month year] ......................
[month year] ......................
[month year] ......................
[month year] ......................
[month year] and thereafter
Weighted Average Life
(years) ...........................
[NOTE TO TRUST COUNSEL: For NTL classes]
*
The decrement table[s] for Class [ ] reflect only the Class [ ] Notional Balance at various rates of PPC and at various levels of [One-Month
CME Term SOFR][,][and] [One-Month Adjusted CME Term SOFR][,][and] [One-Year CME Term SOFR] [,][and] [One-Year Adjusted
CME Term SOFR][,][and] [30-day Average SOFR] [and One-Year CMT]. In addition to the current interest accrual amount on the Class [
] Notional Balance at the Class [ ] Interest Rate, Class [ ] is entitled to the Class [ ] Deferred Interest Amount. No representation is made
about the timing of distributions of the Class [ ] Deferred Interest Amount other than that such amount will be paid no later than the Final
Distribution Date for Class [ ]. ]
Yield Considerations
An investor seeking to maximize yield should make a decision whether to invest in any
Regular [or MX] Class based on:
S-46
VII-2-46
•
the anticipated yield of that Class resulting from its purchase price,
•
the investor's own projection of Maturity Events and deferrals of Maturity Events
in respect of the HECMs related to the Participations underlying the HECM MBS,
•
the investor's own projection of prepayments in respect of the HECMs related to
the Participations underlying the HECM MBS,
•
the investor's own projection of the occurrence of any Ginnie Mae Issuer Purchase
Events,
•
the investor's own projection of draw activity with respect to the HECMs[,] [and]
•
[in the case of the Group [ ] [and [ ]] Securities, the investor's own projection of
[One-Month CME Term SOFR] under a variety of scenarios[,][.] [and,]
•
[in the case of the Group [ ] [and [ ]] Securities, the investor's own projection of
[One-Year CME Term SOFR] under a variety of scenarios][,][.] [and,]
•
[in the case of the Group [ ] Securities, the investor's own projection of 30-day
Average SOFR under a variety of scenarios[,][.] [and,]
•
[in the case of the Group [ ] Securities, the investor's own projection of One-Year
CMT under a variety of scenarios][.] [and,]
•
[in the case of the Group [8] Securities, the investors own projection of the rate of
reduction and increase in [principal] [and] [or] [notional] balance [and deferred
interest amount][s] of the Underlying Certificate[s] under a variety of scenarios].
No representation is made regarding Maturity Events or prepayments in respect
of the HECMs related to the Participations underlying the HECM MBS, the
occurrence of any Ginnie Mae Issuer Purchase Events, [One-Month CME Term
SOFR levels], [One-Month Adjusted CME Term SOFR levels][,] [One-Year CME
Term SOFR levels][,] [One-Year Adjusted CME Term SOFR levels][,] [30-day
Average SOFR levels][,] [One-Year CMT levels,] draw activity with respect to the
HECMs[, Underlying Certificate rates of reduction or increase in [principal]
[notional] balance [and deferred interest amount]] or the yield on any Class.
Prepayments: Effect on Yields
The yields to investors will be sensitive in varying degrees to the rate of prepayments on
the related HECMs.
•
In the case of Regular [or MX] Securities purchased at a premium (especially the
Interest Only Class[es)], faster than anticipated rates of principal payments could result
in actual yields to investors that are lower than the anticipated yields.
S-47
VII-2-47
•
Investors in the Interest Only Class[es] should also consider the risk that rapid rates of
principal payments could result in the failure of investors to recover fully their
investments.
•
In the case of Regular [or MX] Securities purchased at a discount, slower than
anticipated rates of principal payments could result in actual yields to investors that are
lower than the anticipated yields.
•
[Investors in Class [ ] should consider that differing rates of reduction in the related
REMIC Securities may ultimately cause such Class to be exchanged for the related
REMIC Securities (consisting primarily or exclusively of an Interest Only Class). In
certain instances, Class [ ] will become an Interest Only Class over time prior to such
exchange.]
See "Risk Factors — Rates of principal payments can reduce your yield" in this
Supplement.
Rapid rates of prepayments on the HECMs are likely to coincide with periods of low
prevailing interest rates.
During periods of low prevailing interest rates, the yields at which an investor may be able
to reinvest amounts received as principal payments on the investor's Class of Securities may be
lower than the yield on that Class.
Slow rates of prepayments on the HECMs are likely to coincide with periods of high
prevailing interest rates.
During periods of high prevailing interest rates, the amount of principal payments available
to an investor for reinvestment at those high rates may be relatively low.
The HECMs will not prepay at any constant rate until maturity, nor will all of the HECMs
underlying any Trust Asset [Group] [or Subgroup] prepay at the same rate at any one time. The
timing of changes in the rate of prepayments may affect the actual yield to an investor, even if the
average rate of principal prepayments is consistent with the investor's expectation. In general, the
earlier a prepayment of principal on the [related] HECMs, the greater the effect on an investor's
yield. As a result, the effect on an investor's yield of principal prepayments occurring at a rate
higher (or lower) than the rate anticipated by the investor during the period immediately following
the Closing Date is not likely to be offset by a later equivalent reduction (or increase) in the rate
of principal prepayments.
[NOTE TO TRUST COUNSEL: Include indices applicable to securities or underlying ARM
HECMs: [One-Month CME Term SOFR] [,] [and] [One-Month Adjusted CME Term SOFR] [,]
[and] [One-Year CME Term SOFR] [,] [and] [One-Year Adjusted CME Term SOFR] [,] [and]
[One-Year CMT] [and] [30-day Average SOFR]: Effect on Yields of the [Group [ ] [and [ ]]
Floating Rate Class[es]
Low levels of [One-Month CME Term SOFR][,] [and] [One-Month Adjusted CME Term
SOFR][,] [and] [One-Year CME Term SOFR][,] [and] [One-Year Adjusted CME Term SOFR][,]
S-48
VII-2-48
[and] [One-Year CMT] [and] [30-day Average SOFR][, as applicable,] can reduce the yield of the
[Group [ ] [and [ ]] Floating Rate Class[es]]. In addition, the [Group [ ] [and [ ]] Floating Rate
Class[es] will not necessarily benefit from a higher yield at high levels of [One-Month CME Term
SOFR] [,] [and] [One-Month Adjusted CME Term SOFR][,] [and] [One-Year CME Term
SOFR][,] [and] [One-Year Adjusted CME Term SOFR][,] [and] [One-Year CMT] [and] [30-day
Average SOFR] [, as applicable,] because the rate on such Class[es] is capped at a maximum rate
described under "Terms Sheet — Interest Rates." See "Risk Factors — The levels of any interest
rate ind[ex][ices] applicable to the [group [ ] and [ ]] Trust Assets or securities will affect
payments and yields on the [group [ ] and [ ]] securities" in this Supplement.]
Payment Delay: Effect on Yields of the [Fixed Rate][ and] [Delay] Class[es] [ ] [and] [ ]
The effective yield on any [Fixed Rate] [or] [Delay] Class[es] [ ] [and] [ ]will be less
than the yield otherwise produced by its Interest Rate and purchase price because, on each
Distribution Date, 30 days' interest will be payable on (or will accrue with respect to) that Class
even though interest began to accrue approximately 50 days earlier.
Yield Tables
The following tables show the pre-tax yields to maturity on a corporate bond equivalent
basis of specified Classes at various constant percentages of PPC[,] [and] [in the case of Class [
], at various constant levels of [One-Month CME Term SOFR][,][and] [One-Month Adjusted CME
Term SOFR][,] [and] [One-Year Adjusted CME Term SOFR][,] [and] [in the case of Class [ ], at
various constant levels of One-Month CME Term SOFR and One-Year CME Term SOFR][,] [and]
[in the case of Class [ ], at various constant levels of One-Year CME Term SOFR][,] [and] [in the
case of Class [ ], at various constant levels of 30-day Average SOFR] [and] [in the case of Class [
], at various constant levels of One-Year CMT].
The HECMs will not prepay or draw at any constant rate until maturity[, and it is unlikely
that [One-Month CME Term SOFR][,] [or] [One-Month Adjusted CME Term SOFR][,] [or] [OneYear CME Term SOFR] [,] [or] [One-Year Adjusted CME Term SOFR][,] [or] [30-day Average
SOFR] [or] [One-Year CMT] will remain constant]. Moreover, it is likely that the HECMs will
experience actual prepayment and draw rates that differ from those of the Modeling Assumptions.
Therefore, the actual pre-tax yield of [any Class] [Class [ ]] may differ from those shown
in the applicable table below for that Class even if the Class is purchased at the assumed
price shown.
The yields were calculated by
1.
determining the monthly discount rates that, when applied to the applicable
assumed streams of cash flows to be paid on the applicable Class, would cause the
discounted present value of the assumed streams of cash flows to equal the assumed
purchase price of that Class plus accrued interest, and
2.
converting the monthly rates to corporate bond equivalent rates.
These calculations do not take into account variations that may occur in the interest rates
at which investors may be able to reinvest funds received by them as distributions on their
S-49
VII-2-49
Securities and consequently do not purport to reflect the return on any investment in any Class
when those reinvestment rates are considered.
The information set forth in the following table[s] was prepared on the basis of the
Modeling Assumptions and the assumption[s] that [(1) the Interest Rate applicable to [the][each]
Floating Rate Class [(other than Class[es] [ ][,][and][ ]) for each Accrual Period following the
first Accrual Period will be based on the indicated level of [One-Month CME Term SOFR][,] [or]
[30-day Average SOFR] [or] [One-Year CMT][, as applicable,][,] [(2)] [the Interest Rate
applicable to Class[es] [ ][,][and][ ] for each Accrual Period beginning with the Accrual Period
related to the Distribution Date in [NOTE TO TRUST COUNSEL: INSERT MONTH AND
YEAR OF DISTRIBUTION DATE RELATED TO THE FIRST INTEREST RATE RESET] will
be based on the indicated level of One-Year CME Term SOFR][,] [(3)] [the HECM MBS Rates
applicable to the Group [ ] [and [ ]] Trust Assets for each Accrual Period following the applicable
Approximate Weighted Average Next Rate Reset Month shown in Exhibit A will be based on the
indicated level of One-Month Adjusted CME Term SOFR,] [(4)] [the HECM MBS Rates
applicable to the Group [ ] Trust Assets for each Accrual Period following the applicable
Approximate Weighted Average Next Rate Reset Month shown in Exhibit A will be based on the
indicated level of One-Year Adjusted CME Term SOFR,] [(5)] [the HECM MBS Rates applicable
to the Group [ ] Trust Assets for each Accrual Period following the applicable Approximate
Weighted Average Next Rate Reset Month shown in Exhibit A will be based on the indicated level
of One-Year CMT] [and [(6) the purchase price of [the][each] Class (expressed as a percentage of
its original Class Notional Balance) plus accrued interest is as indicated in the related table. The
assumed purchase price is not necessarily that at which actual sales will occur.
[SECURITY GROUP [ ] ]
[NOTE TO TRUST COUNSEL: Form yield table for Notional Classes in Groups with Fixed
Rate or HWAC classes and corresponding Notional Classes]
Sensitivity of Class [ ] to Prepayments
Assumed Price [ ]%*
[75]%
%
PPC Prepayment Assumption Rates
[100]%
[125]%
%
%
[SECURITY GROUP [
[150]%
%
]]
[NOTE TO TRUST COUNSEL: Form yield table for Notional Classes in Groups with Floating
Rate Classes and corresponding Notional Classes]
S-50
VII-2-50
Sensitivity of Class [ ] to Prepayments
Assumed Price [ ]%*
[[ ]% One-Month CME Term SOFR]
[[ ]% One-Month Adjusted CME Term SOFR
[[ ]% One-Year CME Term SOFR]
[[ ]% One-Year Adjusted CME Term SOFR]
[[ ]% 30-day Average SOFR]
[[ ]% One-Year CMT]
PPC Prepayment Assumption Rates
[One-Year CMT][One-Month CME Term SOFR]
[One-Year CME Term SOFR] 30-day Average
SOFR]
[75]% [100]% [125]% [150]%
[
]%.............................................................
%
( )% ( )% ( )%
[
]%.............................................................
%
( )% ( )% ( )%
[
]%.............................................................
%
( )% ( )% ( )%
[
]%.............................................................
%
( )% ( )% ( )%
[
]%..........
.............................................................
[**]
[**]
[**]
[**]
*
The price does not include accrued interest. Accrued interest has been added to the price in calculating the yields set forth in the table.
[** Indicates that investors will suffer a loss of virtually all of their investment. ]
CERTAIN UNITED STATES FEDERAL INCOME TAX CONSEQUENCES
The following tax discussion, when read in conjunction with the discussion of "Certain United
States Federal Income Tax Consequences" in the Base Offering Circular, describes the material
United States federal income tax considerations for investors in the Securities. However, these
two tax discussions do not purport to deal with all United States federal tax consequences
applicable to all categories of investors, some of which may be subject to special rules.
REMIC Elections
In the opinion of [INSERT NAME OF TRUST COUNSEL], the Trust will constitute a
Double REMIC Series [as to the [Group 1] Trust Assets, a Double REMIC Series as to the Group
2 Trust Assets, a Double REMIC Series as to the Group 3 Trust Assets, a Double REMIC Series
as to the Group 4 Trust Assets and a Double REMIC Series as to the Group 5 Trust Assets, each]
for United States federal income tax purposes. Separate REMIC elections will be made for the
[Pooling REMIC and the Issuing REMIC] [Group 1 Pooling REMIC, the Group 1 Issuing REMIC,
the Group 2 Pooling REMIC, the Group 2 Issuing REMIC, the Group 3 Pooling REMIC, the Group
3 Issuing REMIC, the Group 4 Pooling REMIC, the Group 4 Issuing REMIC, the Group 5 Pooling
REMIC and the Group 5 Issuing REMIC].
Regular Securities
The Regular Securities will be treated as debt instruments issued by the [Issuing REMIC]
[Group 1 Issuing REMIC, the Group 2 Issuing REMIC, the Group 3 Issuing REMIC, the Group 4
Issuing REMIC or the Group 5 Issuing REMIC, as applicable,] for United States federal income
S-51
VII-2-51
tax purposes. Income on the Regular Securities must be reported under an accrual method of
accounting.
The Notional and HECM MBS Accrual Classes of Regular Securities will be issued with
original issue discount ("OID"). See "Certain United States Federal Income Tax Consequences
— Tax Treatment of Regular Securities — Original Issue Discount," "— Variable Rate Securities"
and "— Interest Weighted Securities and Non-VRDI Securities" in the Base Offering Circular.
The prepayment assumption that should be used, among other things, in determining the
rates of accrual of OID on the Regular Securities is [100]% PPC (as described in "Yield, Maturity
and Prepayment Considerations" in this Supplement). [In the case of the [Class [ ] and Class [
] Securities] [Floating Rate Class[es], the interest rate value[s] to be used for these determinations
[is][are] the initial Interest Rate[s] as set forth in the Terms Sheet under "Interest Rates."] No
representation is made, however, about the rate at which prepayments on the HECMs underlying
[any Group of] [the] Participations actually will occur [or the level of [One-Month CME Term
SOFR][,] [or] [One-Month Adjusted CME Term SOFR][,] [or] [One-Year CME Term SOFR][,]
[or] [One-Year Adjusted CME Term SOFR][,] [or] [30-day Average SOFR] [or] [One-Year CMT]
at any time after the date of this Supplement]. See "Certain United States Federal Income Tax
Consequences" in the Base Offering Circular. In view of the complexities as to the manner of
inclusion in income of OID on the Regular Securities, investors should consult their own tax
advisors to determine the appropriate amount and method of inclusion in income of OID on the
Regular Securities for United States federal income tax purposes.
The Regular Securities generally will be treated as "regular interests" in a REMIC for
domestic building and loan associations and "real estate assets" for real estate investment trusts
("REITs") as described in "Certain United States Federal Income Tax Consequences" in the Base
Offering Circular. Similarly, interest on the Regular Securities will be considered "interest on
obligations secured by mortgages on real property" for REITs as described in "Certain United
States Federal Income Tax Consequences" in the Base Offering Circular.
Residual Securities
[The Class RR Securities will represent the beneficial ownership of the Residual Interest in
the Pooling REMIC and the beneficial ownership of the Residual Interest in the Issuing REMIC.]
[Each Class of Residual Securities will represent the beneficial ownership of the Residual
Interest in the related Trust REMICs, as shown below:
Residual Securities
Class RR[ ] Securities
Class RR[ ] Securities
Trust REMIC
Group [ ] Pooling REMIC and Group [ ] Issuing REMIC
Group [ ] Pooling REMIC and Group [ ] Issuing REMIC
The Residual Securities generally will be treated as "residual interests" in a REMIC for
domestic building and loan associations and as "real estate assets" for REITs, as described in
"Certain United States Federal Income Tax Consequences" in the Base Offering Circular, but will
not be treated as debt for United States federal income tax purposes. Instead, the Holders of the
S-52
VII-2-52
Residual Securities will be required to report, and will be taxed on, their pro rata shares of the
taxable income or loss of the [related] Trust REMICs, and these requirements will continue until
there are no outstanding regular interests in the respective Trust REMICs. Thus, Residual Holders
will have taxable income attributable to the Residual Securities even though they will not receive
principal or interest distributions with respect to the Residual Securities, which could result in a
negative after-tax return for the Residual Holders. Even though the Holders of the Residual
Securities are not entitled to any stated principal or interest payments on the Residual Securities,
the [related] Trust REMICs may have substantial taxable income in certain periods, and offsetting
tax losses may not occur until much later periods. Accordingly, the Holders of the Residual
Securities may experience substantial adverse tax timing consequences. Prospective investors are
urged to consult their own tax advisors and consider the after-tax effect of ownership of the
Residual Securities and the suitability of the Residual Securities to their investment objectives.
Prospective Holders of Residual Securities should be aware that, at issuance, based on the
expected prices of the Regular and Residual Securities and the prepayment assumption described
above, the residual interests represented by the Residual Securities will be treated as "noneconomic
residual interests" as that term is defined in Treasury regulations.
[OID accruals on the Underlying Certificate[s] will be computed using the same
prepayment assumptions as set forth under "Certain United States Federal Income Tax
Consequences — Regular Securities" in this Supplement.]
[MX Securities
For a discussion of certain United States federal income tax consequences applicable to the
MX Class[es], see "Certain United States Federal Income Tax Consequences — Tax Treatment of
MX Securities," "— Exchanges of MX Classes and Regular Classes" and "— Taxation of Foreign
Holders of REMIC Securities and MX Securities" in the Base Offering Circular.]
Investors should consult their own tax advisors in determining the United States
federal, state, local, foreign and any other tax consequences to them of the purchase,
ownership and disposition of the Securities.
ERISA MATTERS
Ginnie Mae guarantees distributions of principal and interest with respect to the Securities.
The Ginnie Mae Guaranty is supported by the full faith and credit of the United States of America.
The Regular [and MX] Securities will qualify as "guaranteed governmental mortgage pool
certificates" within the meaning of a Department of Labor regulation, the effect of which is to
provide that mortgage loans and participations therein underlying a "guaranteed governmental
mortgage pool certificate" will not be considered assets of an employee benefit plan subject to the
Employee Retirement Income Security Act of 1974, as amended ("ERISA"), or subject to Section
4975 of the Code (each, a "Plan"), solely by reason of the Plan's purchase and holding of that
certificate.
Prospective Plan Investors should consult with their advisors to determine whether
the purchase, holding or resale of a Security could give rise to a transaction that is prohibited
or is not otherwise permissible under either ERISA or the Code.
S-53
VII-2-53
Governmental plans and certain church plans, while not subject to the fiduciary
responsibility provisions of ERISA or the prohibited transaction provisions of ERISA and the
Code, may nevertheless be subject to local, state or other federal laws that are substantially similar
to the foregoing provisions of ERISA and the Code ("Similar Law").
Fiduciaries of any such Plans or governmental or church plans subject to Similar Law
should consult with their counsel before purchasing any of the Securities.
See "ERISA Considerations" in the Base Offering Circular.
The Residual Securities are not offered to, and may not be transferred to, a Plan Investor.
LEGAL INVESTMENT CONSIDERATIONS
Institutions whose investment activities are subject to legal investment laws and regulations
or to review by certain regulatory authorities may be subject to restrictions on investment in the
Securities. No representation is made about the proper characterization of any Class for
legal investment or other purposes, or about the permissibility of the purchase by particular
investors of any Class under applicable legal investment restrictions.
Investors should consult their own legal advisors regarding applicable investment
restrictions and the effect of any restrictions on the liquidity of the Securities prior to
investing in the Securities.
See "Legal Investment Considerations" in the Base Offering Circular.
PLAN OF DISTRIBUTION
Subject to the terms and conditions of the Sponsor Agreement, the Sponsor has agreed to
purchase all of the Securities if any are sold and purchased. The Sponsor proposes to offer the
Regular [and MX] Classes to the public from time to time for sale in negotiated transactions at
varying prices to be determined at the time of sale, plus accrued interest from [(1) [
], 20[ ] on
the Fixed Rate and Delay Classes] and [(2) [
], 20[ ] on the Floating Rate [and Group [ ]
Interest Only] Classes]. The Sponsor may effect these transactions by sales to or through certain
securities dealers. These dealers may receive compensation in the form of discounts, concessions
or commissions from the Sponsor and/or commissions from any purchasers for which they act as
agents. Some of the Securities may be sold through dealers in relatively small sales. In the usual
case, the commission charged on a relatively small sale of securities will be a higher percentage
of the sales price than that charged on a large sale of securities.
INCREASE IN SIZE
Before the Closing Date, Ginnie Mae, the Trustee and the Sponsor may agree to increase
the size of this offering. In that event, the Securities will have the same characteristics as described
in this Supplement, except that the Original Class Principal Balance (or original Class Notional
Balance) of each Class receiving principal distributions or interest distributions based upon a
notional balance [from the same Trust Asset Group] [or Subgroup] will increase by the same
S-54
VII-2-54
proportion. The Trust Agreement, the Final Data Statement and the Supplemental Statement, if
any, will reflect any increase in the size of the transaction.
LEGAL MATTERS
[
Certain legal matters will be passed upon for Ginnie Mae by [
], and [
], and for the Trustee by [
].
S-55
], for the Trust by
VII-2-55
[Schedule I]
Available Combination[s](1)
REMIC Securities
Original Class
[Principal] [or]
[Notional]
Balance
Class
Security Group [ ]
Combination 1
$
[JI]
[KI]
Security Group [ ]
Combination 2
$
[FT]
[TI]
Security Group [ ]
Combination 3
$
[FG]
[GI]
Security Group[s] [ ] and [ ]
Combination 4 (6)
$
[ ]
[ ]
__________
(1)
(2)
(3)
(4)
[(5)
[(6)
Related
MX Class
[IO]
Maximum
Original Class
[Principal] [or]
[Notional]
Balance(2)
$
MX Securities
Principal
Type(3)
NTL(HPT)
Interest
CUSIP
Rate
Interest Type(3) Number
[(6)]
Final
Distribution
Date(4)
HWAC/IO/DLY
$
[(8)]
HPT
GH [(7)]
$
[(8)]
HPT
[(6)]
HWAC/HZ/DLY
[ ] [(7)]
$
HPT
[(6)]
FLT/HWAC/HZ
[ ]% HWAC/HZ/DLY
All exchanges must comply with minimum denomination restrictions.
The amount shown for [the][each] MX Class represents the maximum [Original Class Principal Balance] [or] [original Class Notional
Balance] of that Class, assuming it were to be issued on the Closing Date.
As defined under "Class Types" in Appendix I to the Base Offering Circular.
See "Yield, Maturity and Prepayment Considerations — Final Distribution Date" in this Supplement.
The Interest Rate will be calculated as described under "Terms Sheet — Interest Rates" in this Supplement. ]
Derived from REMIC Classes relating to separate Groups.
S-I-1
VII-2-56
[(7)
[(8)
In the event that the Interest Rate of this MX Class will equal or exceed 1,200% per annum for any Accrual Period, the Trustee will, prior to
the close of business on the last Business Day of the calendar month immediately preceding the related Distribution Date, effect a mandatory
exchange of this MX Class for its related REMIC Securities and, thereafter, no further exchanges of such REMIC Securities will be permitted
[for the related Combination].]
NOTE TO TRUST COUNSEL: For MX Classes where related REMIC Classes are a mix of NTL and P&I: The Class Principal Balance of
Class [ ] will increase or decrease, as applicable, with 100% of the sum of (a) [ ]% of the Class [ ] Principal Balance and (b) [ ]% of the
Class [ ] Deferred Interest Amount.]
S-I-2
VII-2-57
example, an entry of "1" signifies that the Approximate Weighted Average Next Rate Reset Month for the adjustable rate HECM's rate is the
first day of [INSERT ONE MONTH AFTER CLOSING AND CURRENT YEAR. e.g., June 2023].]
[(6)] The Approximate Weighted Average Gross Interest Rate is the weighted average of the gross interest rates of the HECMs related to the
Participations underlying the related HECM MBS [or Ginnie Mae Platinum Certificate backed by HECM MBS] for such payment plan as of
[INSERT FIRST DAY OF CURRENT MONTH AND YEAR, e.g. June 1, 2023].
[(7)
The Approximate Weighted Average Gross Margin is the weighted average of the gross margins of the adjustable rate HECMs related to the
Participations underlying the related HECM MBS [or Ginnie Mae Platinum Certificate backed by HECM MBS] for such payment plan as of
[INSERT FIRST DAY OF CURRENT MONTH AND YEAR, e.g. June 1, 2023].]
[(8)
The Approximate Weighted Average Gross Lifetime Interest Rate Floor is the weighted average of the lowest interest rates possible based on
the interest rate formula and HECM loan documents applicable to the adjustable rate HECMs related to the Participations underlying the
related HECM MBS for such payment plan as of [INSERT FIRST DAY OF CURRENT MONTH AND YEAR, e.g. June 1, 2023].]
[(9)
The Approximate Weighted Average Gross Lifetime Interest Rate Cap is the weighted average of the maximum interest rates possible based
on the interest rate formula and HECM loan documents applicable to the adjustable rate HECMs related to the Participations underlying the
related HECM MBS for such payment plan as of [INSERT FIRST DAY OF CURRENT MONTH AND YEAR, e.g. June 1, 2023].]
[(10)] The Approximate Weighted Average MIP Fee is the weighted average of the MIP Fees of the HECMs related to the Participations underlying
the related HECM MBS [or Ginnie Mae Platinum Certificate backed by HECM MBS] for such payment plan as of [INSERT FIRST DAY
OF CURRENT MONTH AND YEAR, e.g. June 1, 2023]. The MIP Fee is charged for FHA mortgage insurance. The MIP Fee is the
monthly mortgage insurance premium ("MIP") that accrues on each HECM.
[(11)] The Approximate Weighted Average Servicing Fee Margin is the weighted average of the Servicing Fee Margins of the HECMs related to the
Participations underlying the related HECM MBS [or Ginnie Mae Platinum Certificate backed by HECM MBS] for such payment plan as of
[INSERT FIRST DAY OF CURRENT MONTH AND YEAR, e.g. June 1, 2023]. The Servicing Fee Margin represents (together with the
Monthly Servicing Fee, if any) the amount of the servicing compensation payable to the Issuer to cover the Issuer's servicing costs. The
Servicing Fee Margin includes the Guaranty Fee charged by Ginnie Mae for the HECM MBS [or Ginnie Mae Platinum Certificate backed by
HECM MBS] guaranty at the annual rate of 0.06% and a participation agent fee, if any. The Approximate Weighted Average Servicing Fee
Margin is included in the rates shown in the columns for Approximate Weighted Average Gross Interest Rate, Approximate Weighted
Average Gross Margin, Approximate Weighted Average Gross Lifetime Interest Rate Floor and Approximate Weighted Average Gross
Lifetime Interest Rate Cap.
[(12)] The Monthly Servicing Fee is the aggregate monthly servicing fee payable to the Issuer if the full amount of the servicing cost is not included
in the HECM interest rate and is in addition to the Servicing Fee Margin.
[(13) The Initial Monthly Scheduled Draw is the aggregate monthly amount that is payable to borrowers in a given month under certain types of
payment plans during the first twelve month disbursement period. ]
[(14) The Subsequent Monthly Scheduled Draw is the aggregate monthly amount that is payable to borrowers in a given month under certain types
of payment plans after the first twelve month disbursement period. ]
[(15) The Approximate Weighted Average Remaining Draw Term (in months) is the weighted average of the remaining draw terms of the HECMs
related to the Participations underlying the related HECM MBS [or Ginnie Mae Platinum Certificate backed by HECM MBS] for such
payment plan. The remaining draw term represents the number of months over which a borrower with a term or modified term payment plan
will receive Monthly Scheduled Draws as of [INSERT FIRST DAY OF CURRENT MONTH AND YEAR, e.g. June 1, 2023]. ]
A-2
VII-2-59
[(16)] The Initial Available Line of Credit is the aggregate of the lines of credit available to borrowers under the Modified Term, Modified Tenure
and Line of Credit payment plans during the first twelve month disbursement period. The Initial Available Line of Credit does not include set
asides for the Monthly Servicing Fee, if any, property charges (such as taxes, hazard insurance, ground rents or assessments) or repairs, if any.
[(17)] The Available Line of Credit is the aggregate of the lines of credit available to borrowers under the Modified Term, Modified Tenure and
Line of Credit payment plans during the lives of their related HECMs. The Available Line of Credit does not include set asides for the
Monthly Servicing Fee, if any, property charges (such as taxes, hazard insurance, ground rents or assessments) or repairs, if any.
[(18)] The sum of the applicable Maximum Claim Amounts with respect to each HECM.
[(19) These HECMs do not have draw terms or monthly scheduled draws.]
[(20) Borrowers who select tenure or modified tenure payment plans have a right to receive monthly draws for their tenure in the property.]
[(21) These HECMs do not have a flat Monthly Servicing Fee in addition to the Servicing Fee Margin.]
[(22) The Lines of Credit related to these HECMs are fully drawn.]
[(23) The draw terms for these HECMs have expired.]
[(24) These HECMs are not subject to restrictions on the amount of the Available Line of Credit available to borrowers during the first twelve month
disbursement period.]
[(25) Platinum Pool]
The actual HECM ages, gross interest rates, gross margins, gross lifetime interest rate floors, gross lifetime interest rate caps, MIP Fees,
Servicing Fee Margins and remaining draw terms of many of the HECMs related to the Participations underlying the Trust Assets will differ from the
approximate weighted averages shown above, perhaps significantly. See "The Trust Assets — The Participations and the HECMs" in this Supplement.
A-3
VII-2-60
Exhibit B
CPR Percentage in Effect by HECM Age
HECM Age (in months)
1 .....................................................................................................................................................
2 .....................................................................................................................................................
3 .....................................................................................................................................................
4 .....................................................................................................................................................
5 .....................................................................................................................................................
6 .....................................................................................................................................................
7 .....................................................................................................................................................
8 .....................................................................................................................................................
9 .....................................................................................................................................................
10 ...................................................................................................................................................
11 ...................................................................................................................................................
12 ...................................................................................................................................................
13 ...................................................................................................................................................
14 ...................................................................................................................................................
15 ...................................................................................................................................................
16 ...................................................................................................................................................
17 ...................................................................................................................................................
18 ...................................................................................................................................................
19 ...................................................................................................................................................
20 ...................................................................................................................................................
21 ...................................................................................................................................................
22 ...................................................................................................................................................
23 ...................................................................................................................................................
24 ...................................................................................................................................................
25 ...................................................................................................................................................
26 ...................................................................................................................................................
27 ...................................................................................................................................................
28 ...................................................................................................................................................
29 ...................................................................................................................................................
30 ...................................................................................................................................................
31 ...................................................................................................................................................
32 ...................................................................................................................................................
33 ...................................................................................................................................................
34 ...................................................................................................................................................
35 ...................................................................................................................................................
36 ...................................................................................................................................................
37 ...................................................................................................................................................
38 ...................................................................................................................................................
39 ...................................................................................................................................................
40 ...................................................................................................................................................
41 ...................................................................................................................................................
42 ...................................................................................................................................................
43 ...................................................................................................................................................
44 ...................................................................................................................................................
45 ...................................................................................................................................................
46 ...................................................................................................................................................
47 ...................................................................................................................................................
48 ...................................................................................................................................................
49 ...................................................................................................................................................
B-1
CPR (%)
0.00000
0.54545
1.09091
1.63636
2.18182
2.72727
3.27273
3.81818
4.36364
4.90909
5.45455
6.00000
6.29167
6.58333
6.87500
7.16667
7.45833
7.75000
8.04167
8.33333
8.62500
8.91667
9.20833
9.50000
9.66667
9.83333
10.00000
10.16667
10.33333
10.50000
10.66667
10.83333
11.00000
11.16667
11.33333
11.50000
11.66667
11.83333
12.00000
12.16667
12.33333
12.50000
12.66667
12.83333
13.00000
13.16667
13.33333
13.50000
13.62240
VII-2-61
50 ...................................................................................................................................................
51 ...................................................................................................................................................
52 ...................................................................................................................................................
53 ...................................................................................................................................................
54 ...................................................................................................................................................
55 ...................................................................................................................................................
56 ...................................................................................................................................................
57 ...................................................................................................................................................
58 ...................................................................................................................................................
59 ...................................................................................................................................................
60 ...................................................................................................................................................
61 ...................................................................................................................................................
62 ...................................................................................................................................................
63 ...................................................................................................................................................
64 ...................................................................................................................................................
65 ...................................................................................................................................................
66 ...................................................................................................................................................
67 ...................................................................................................................................................
68 ...................................................................................................................................................
69 ...................................................................................................................................................
70 ...................................................................................................................................................
71 ...................................................................................................................................................
72 ...................................................................................................................................................
73 ...................................................................................................................................................
74 ...................................................................................................................................................
75 ...................................................................................................................................................
76 ...................................................................................................................................................
77 ...................................................................................................................................................
78 ...................................................................................................................................................
79 ...................................................................................................................................................
80 ...................................................................................................................................................
81 ...................................................................................................................................................
82 ...................................................................................................................................................
83 ...................................................................................................................................................
84 ...................................................................................................................................................
85 ...................................................................................................................................................
86 ...................................................................................................................................................
87 ...................................................................................................................................................
88 ...................................................................................................................................................
89 ...................................................................................................................................................
90 ...................................................................................................................................................
91 ...................................................................................................................................................
92 ...................................................................................................................................................
93 ...................................................................................................................................................
94 ...................................................................................................................................................
95 ...................................................................................................................................................
96 ...................................................................................................................................................
97 ...................................................................................................................................................
98 ...................................................................................................................................................
99 ...................................................................................................................................................
100 .................................................................................................................................................
101 .................................................................................................................................................
102 .................................................................................................................................................
103 .................................................................................................................................................
104 .................................................................................................................................................
105 .................................................................................................................................................
B-2
13.74479
13.86719
13.98958
14.11198
14.23438
14.35677
14.47917
14.60156
14.72396
14.84635
14.96875
15.09115
15.21354
15.33594
15.45833
15.58073
15.70313
15.82552
15.94792
16.07031
16.19271
16.31510
16.43750
16.55990
16.68229
16.80469
16.92708
17.04948
17.17188
17.29427
17.41667
17.53906
17.66146
17.78385
17.90625
18.02865
18.15104
18.27344
18.39583
18.51823
18.64063
18.76302
18.88542
19.00781
19.13021
19.25260
19.37500
19.49740
19.61979
19.74219
19.86458
19.98698
20.10938
20.23177
20.35417
20.47656
VII-2-62
106 ................................................................................................................................................
107 ................................................................................................................................................
108 ................................................................................................................................................
109 ................................................................................................................................................
110 ................................................................................................................................................
111 ................................................................................................................................................
112 ................................................................................................................................................
113 ................................................................................................................................................
114 ................................................................................................................................................
115 ................................................................................................................................................
116 ................................................................................................................................................
117 ................................................................................................................................................
118 ................................................................................................................................................
119 ................................................................................................................................................
120 ................................................................................................................................................
121 ................................................................................................................................................
122 ................................................................................................................................................
123 ................................................................................................................................................
124 ................................................................................................................................................
125 ................................................................................................................................................
126 ................................................................................................................................................
127 ................................................................................................................................................
128 ................................................................................................................................................
129 ................................................................................................................................................
130 ................................................................................................................................................
131 ................................................................................................................................................
132 ................................................................................................................................................
133 ................................................................................................................................................
134 ................................................................................................................................................
135 ................................................................................................................................................
136 ................................................................................................................................................
137 ................................................................................................................................................
138 ................................................................................................................................................
139 ................................................................................................................................................
140 ................................................................................................................................................
141 ................................................................................................................................................
142 ................................................................................................................................................
143 ................................................................................................................................................
144 ................................................................................................................................................
145 ................................................................................................................................................
146 ................................................................................................................................................
147 ................................................................................................................................................
148 ................................................................................................................................................
149 ................................................................................................................................................
150 ................................................................................................................................................
151 ................................................................................................................................................
152 ................................................................................................................................................
153 ................................................................................................................................................
154 ................................................................................................................................................
155 ................................................................................................................................................
156 ................................................................................................................................................
157 ................................................................................................................................................
158 ................................................................................................................................................
159 ................................................................................................................................................
160 ................................................................................................................................................
161 ................................................................................................................................................
B-3
20.59896
20.72135
20.84375
20.96615
21.08854
21.21094
21.33333
21.45573
21.57813
21.70052
21.82292
21.94531
22.06771
22.19010
22.31250
22.43490
22.55729
22.67969
22.80208
22.92448
23.04688
23.16927
23.29167
23.41406
23.53646
23.65885
23.78125
23.90365
24.02604
24.14844
24.27083
24.39323
24.51563
24.63802
24.76042
24.88281
25.00521
25.12760
25.25000
25.37240
25.49479
25.61719
25.73958
25.86198
25.98438
26.10677
26.22917
26.35156
26.47396
26.59635
26.71875
26.84115
26.96354
27.08594
27.20833
27.33073
VII-2-63
162 ................................................................................................................................................
163 ................................................................................................................................................
164 ................................................................................................................................................
165 ................................................................................................................................................
166 ................................................................................................................................................
167 ................................................................................................................................................
168 ................................................................................................................................................
169 ................................................................................................................................................
170 ................................................................................................................................................
171 ................................................................................................................................................
172 ................................................................................................................................................
173 ................................................................................................................................................
174 ................................................................................................................................................
175 ................................................................................................................................................
176 ................................................................................................................................................
177 ................................................................................................................................................
178 ................................................................................................................................................
179 ................................................................................................................................................
180 ................................................................................................................................................
181 ................................................................................................................................................
182 ................................................................................................................................................
183 ................................................................................................................................................
184 ................................................................................................................................................
185 ................................................................................................................................................
186 ................................................................................................................................................
187 ................................................................................................................................................
188 ................................................................................................................................................
189 ................................................................................................................................................
190 ................................................................................................................................................
191 ................................................................................................................................................
192 ................................................................................................................................................
193 ................................................................................................................................................
194 ................................................................................................................................................
195 ................................................................................................................................................
196 ................................................................................................................................................
197 ................................................................................................................................................
198 ................................................................................................................................................
199 ................................................................................................................................................
200 ................................................................................................................................................
201 ................................................................................................................................................
202 ................................................................................................................................................
203 ................................................................................................................................................
204 ................................................................................................................................................
205 ................................................................................................................................................
206 ................................................................................................................................................
207 ................................................................................................................................................
208 ................................................................................................................................................
209 ................................................................................................................................................
210 ................................................................................................................................................
211 ................................................................................................................................................
212 ................................................................................................................................................
213 ................................................................................................................................................
214 ................................................................................................................................................
215 ................................................................................................................................................
216 ................................................................................................................................................
217 ................................................................................................................................................
B-4
27.45313
27.57552
27.69792
27.82031
27.94271
28.06510
28.18750
28.30990
28.43229
28.55469
28.67708
28.79948
28.92188
29.04427
29.16667
29.28906
29.41146
29.53385
29.65625
29.77865
29.90104
30.02344
30.14583
30.26823
30.39063
30.51302
30.63542
30.75781
30.88021
31.00260
31.12500
31.24740
31.36979
31.49219
31.61458
31.73698
31.85938
31.98177
32.10417
32.22656
32.34896
32.47135
32.59375
32.71615
32.83854
32.96094
33.08333
33.20573
33.32813
33.45052
33.57292
33.69531
33.81771
33.94010
34.06250
34.18490
VII-2-64
218 ................................................................................................................................................
219 ................................................................................................................................................
220 ................................................................................................................................................
221 ................................................................................................................................................
222 ................................................................................................................................................
223 ................................................................................................................................................
224 ................................................................................................................................................
225 ................................................................................................................................................
226 ................................................................................................................................................
227 ................................................................................................................................................
228 ................................................................................................................................................
229 ................................................................................................................................................
230 ................................................................................................................................................
231 ................................................................................................................................................
232 ................................................................................................................................................
233 ................................................................................................................................................
234 ................................................................................................................................................
235 ................................................................................................................................................
236 ................................................................................................................................................
237 ................................................................................................................................................
238 ................................................................................................................................................
239 ................................................................................................................................................
240 ................................................................................................................................................
241 ................................................................................................................................................
242 ................................................................................................................................................
243 ................................................................................................................................................
244 ................................................................................................................................................
245 ................................................................................................................................................
246 ................................................................................................................................................
247 ................................................................................................................................................
248 ................................................................................................................................................
249 ................................................................................................................................................
250 ................................................................................................................................................
251 ................................................................................................................................................
252 ................................................................................................................................................
253 ................................................................................................................................................
254 ................................................................................................................................................
255 ................................................................................................................................................
256 ................................................................................................................................................
257 ................................................................................................................................................
258 ................................................................................................................................................
259 ................................................................................................................................................
260 ................................................................................................................................................
261 ................................................................................................................................................
262 ................................................................................................................................................
263 ................................................................................................................................................
264 ................................................................................................................................................
265 ................................................................................................................................................
266 ................................................................................................................................................
267 ................................................................................................................................................
268 ................................................................................................................................................
269 ................................................................................................................................................
270 ................................................................................................................................................
271 ................................................................................................................................................
272 ................................................................................................................................................
273 ................................................................................................................................................
B-5
34.30729
34.42969
34.55208
34.67448
34.79688
34.91927
35.04167
35.16406
35.28646
35.40885
35.53125
35.65365
35.77604
35.89844
36.02083
36.14323
36.26563
36.38802
36.51042
36.63281
36.75521
36.87760
37.00000
37.05000
37.10000
37.15000
37.20000
37.25000
37.30000
37.35000
37.40000
37.45000
37.50000
37.55000
37.60000
37.65000
37.70000
37.75000
37.80000
37.85000
37.90000
37.95000
38.00000
38.05000
38.10000
38.15000
38.20000
38.25000
38.30000
38.35000
38.40000
38.45000
38.50000
38.55000
38.60000
38.65000
VII-2-65
274 .................................................................................................................................................
275 .................................................................................................................................................
276 .................................................................................................................................................
277 .................................................................................................................................................
278 .................................................................................................................................................
279 .................................................................................................................................................
280 .................................................................................................................................................
281 .................................................................................................................................................
282 .................................................................................................................................................
283 .................................................................................................................................................
284 .................................................................................................................................................
285 .................................................................................................................................................
286 .................................................................................................................................................
287 .................................................................................................................................................
288 .................................................................................................................................................
289 .................................................................................................................................................
290 .................................................................................................................................................
291 .................................................................................................................................................
292 .................................................................................................................................................
293 .................................................................................................................................................
294 .................................................................................................................................................
295 .................................................................................................................................................
296 .................................................................................................................................................
297 .................................................................................................................................................
298 .................................................................................................................................................
299 .................................................................................................................................................
300 .................................................................................................................................................
301 .................................................................................................................................................
302 .................................................................................................................................................
303 .................................................................................................................................................
304 .................................................................................................................................................
305 .................................................................................................................................................
306 .................................................................................................................................................
307 .................................................................................................................................................
308 .................................................................................................................................................
309 .................................................................................................................................................
310 .................................................................................................................................................
311 .................................................................................................................................................
312 .................................................................................................................................................
313 .................................................................................................................................................
314 .................................................................................................................................................
315 .................................................................................................................................................
316 .................................................................................................................................................
317 .................................................................................................................................................
318 .................................................................................................................................................
319 .................................................................................................................................................
320 .................................................................................................................................................
321 .................................................................................................................................................
322 .................................................................................................................................................
323 .................................................................................................................................................
324 .................................................................................................................................................
325 .................................................................................................................................................
326 .................................................................................................................................................
327 .................................................................................................................................................
328 .................................................................................................................................................
329 .................................................................................................................................................
B-6
38.70000
38.75000
38.80000
38.85000
38.90000
38.95000
39.00000
39.05000
39.10000
39.15000
39.20000
39.25000
39.30000
39.35000
39.40000
39.45000
39.50000
39.55000
39.60000
39.65000
39.70000
39.75000
39.80000
39.85000
39.90000
39.95000
40.00000
40.05000
40.10000
40.15000
40.20000
40.25000
40.30000
40.35000
40.40000
40.45000
40.50000
40.55000
40.60000
40.65000
40.70000
40.75000
40.80000
40.85000
40.90000
40.95000
41.00000
41.05000
41.10000
41.15000
41.20000
41.25000
41.30000
41.35000
41.40000
41.45000
VII-2-66
330 .................................................................................................................................................
331 .................................................................................................................................................
332 .................................................................................................................................................
333 .................................................................................................................................................
334 .................................................................................................................................................
335 .................................................................................................................................................
336 .................................................................................................................................................
337 .................................................................................................................................................
338 .................................................................................................................................................
339 .................................................................................................................................................
340 .................................................................................................................................................
341 .................................................................................................................................................
342 .................................................................................................................................................
343 .................................................................................................................................................
344 .................................................................................................................................................
345 .................................................................................................................................................
346 .................................................................................................................................................
347 .................................................................................................................................................
348 .................................................................................................................................................
349 .................................................................................................................................................
350 .................................................................................................................................................
351 .................................................................................................................................................
352 .................................................................................................................................................
353 .................................................................................................................................................
354 .................................................................................................................................................
355 .................................................................................................................................................
356 .................................................................................................................................................
357 .................................................................................................................................................
358 .................................................................................................................................................
359 .................................................................................................................................................
360 and thereafter ..........................................................................................................................
B-7
41.50000
41.55000
41.60000
41.65000
41.70000
41.75000
41.80000
41.85000
41.90000
41.95000
42.00000
42.05000
42.10000
42.15000
42.20000
42.25000
42.30000
42.35000
42.40000
42.45000
42.50000
42.55000
42.60000
42.65000
42.70000
42.75000
42.80000
42.85000
42.90000
42.95000
43.00000
VII-2-67
[Exhibit C]
Draw Curve in Effect by HECM Age
HECM Age (in months)
1 ...............................................................................................................................
2 ...............................................................................................................................
3 ...............................................................................................................................
4 ...............................................................................................................................
5 ...............................................................................................................................
6 ...............................................................................................................................
7 ...............................................................................................................................
8 ...............................................................................................................................
9 ...............................................................................................................................
10 .............................................................................................................................
11 .............................................................................................................................
12 .............................................................................................................................
13 .............................................................................................................................
14 .............................................................................................................................
15 .............................................................................................................................
16 .............................................................................................................................
17 .............................................................................................................................
18 .............................................................................................................................
19 ..............................................................................................................................
20 .............................................................................................................................
21 .............................................................................................................................
22 .............................................................................................................................
23 .............................................................................................................................
24 .............................................................................................................................
25 .............................................................................................................................
26 .............................................................................................................................
27 .............................................................................................................................
28 .............................................................................................................................
29 .............................................................................................................................
30 .............................................................................................................................
31 .............................................................................................................................
32 .............................................................................................................................
33 .............................................................................................................................
34 .............................................................................................................................
35 .............................................................................................................................
36 .............................................................................................................................
37 .............................................................................................................................
38 .............................................................................................................................
39 .............................................................................................................................
40 .............................................................................................................................
41 .............................................................................................................................
42 .............................................................................................................................
43 .............................................................................................................................
44 .............................................................................................................................
45 .............................................................................................................................
46 .............................................................................................................................
47 .............................................................................................................................
48 .............................................................................................................................
C-1
Annualized
Draw Rate (%)
14.00000
9.00000
8.00000
7.33333
6.66667
6.00000
5.83333
5.66667
5.50000
5.33333
5.16667
5.00000
4.83333
4.66667
4.50000
4.33333
4.16667
4.00000
3.86111
3.72222
3.58333
3.44444
3.30556
3.16667
3.02778
2.88889
2.75000
2.61111
2.47222
2.33333
2.19444
2.05556
1.91667
1.77778
1.63889
1.50000
1.43750
1.37500
1.31250
1.25000
1.18750
1.12500
1.06250
1.00000
0.93750
0.87500
0.81250
0.75000
VII-2-68
HECM Age (in months)
49 .............................................................................................................................
50 .............................................................................................................................
51 .............................................................................................................................
52 .............................................................................................................................
53 .............................................................................................................................
54 .............................................................................................................................
55 .............................................................................................................................
56 .............................................................................................................................
57 .............................................................................................................................
58 .............................................................................................................................
59 .............................................................................................................................
60 and thereafter ......................................................................................................
C-2
Annualized
Draw Rate (%)
0.68750
0.62500
0.56250
0.50000
0.43750
0.37500
0.31250
0.25000
0.18750
0.12500
0.06250
0.00000]
VII-2-69
[Exhibit D]
Underlying Certificate[s]
Trust Asset
Group [or
Subgroup]
Issuer Series Class
Issue
Date
CUSIP
Number
Interest
Rate
Interest
Type(1)
Final
Distribution
Date
Principal
Type(1)
Original Class
[Principal]
[or] [Notional]
Balance
Underlying
Certificate
Factor(2)
Approximate
[Principal]
Cumulative
[or] [Notional]
Deferred Interest
Balance in
Amount
Trust(3)
Percentage
of Class in
Trust
[Approximate
Approximate
Weighted
Weighted Average
HECM Age (in
Average] Gross
months) (4)
Rate of HECMs(4)
[(5)]
(1) As defined under "Class Types" in Appendix I to the Base Offering Circular.
(2) [Underlying Certificate Factor[s] [are] [is] as of [INSERT CURRENT MONTH AND YEAR].
(3) [The [Principal][or] [Notional] Balance in Trust was obtained using the current Class [Principal] [or] [Notional] of the [related] Underlying Certificate from
data provided to the Sponsor by the participation agent as of [INSERT CURRENT MONTH 1, CURRENT YEAR], instead of the truncated balance from
ginniemae.gov.
(4) Based on information as of the first Business Day of [INSERT CURRENT MONTH AND YEAR].
[(5) See "Terms Sheet — Interest Rates" in the [related] Underlying Certificate Disclosure Document.]
D-1
VII-2-70
[Exhibit E]
Updated Exhibit A
Assumed Characteristics of the HECMs and the Participations Underlying the Group [8] Trust Assets
[Insert table and footnotes from Exhibit A, as applicable]
E-1
VII-2-71
$[__]
Government National
Mortgage Association
GINNIE MAE®
Guaranteed HECM MBS REMIC
Pass-Through Securities
[and MX Securities]
Ginnie Mae REMIC Trust 20[__]-H[__]
OFFERING CIRCULAR SUPPLEMENT
[______], 20[__]
[Sponsor]
[Co-Sponsor]
048464.0002259 DMS 302284891v5
VII-2-72
FORM OF ACCOUNTANTS’ AGREED-UPON PROCEDURES REPORT
CONCERNING THE OFFERING CIRCULAR SUPPLEMENT FOR
HREMIC TRANSACTIONS
Independent Accountant’s Report on Applying Agreed-Upon Procedures
[Sponsor]
[Address]
Government National Mortgage Association
Office of Capital Markets
425 3rd Street S.W., 4th floor
Washington, DC 20024
Re:
Ginnie Mae REMIC Trust 20__-__ (the "[REMIC] Securities") [and Ginnie Mae MX
Trust 20__-__ (the "MX Securities" and together with the REMIC Securities, the
"Securities")]
Ladies and Gentlemen:
We have performed the procedures enumerated below, related to certain information included in
the Offering Circular Supplement dated [print date] (the “Supplement”), to the Base Offering
Circular dated __, 20__ (the “Base Offering Circular”), relating to the offering of the Securities
(the “Subject Matter”). [Sponsor Name] (the “Sponsor” or the “Engaging Party”) is responsible
for the Subject Matter.
The Sponsor and Government National Mortgage Association (“Ginnie Mae” and together with
the Sponsor, the “Specified Parties”) have agreed to and acknowledged that the procedures
performed are appropriate to meet the intended purpose of evaluating the accuracy of certain
information related to the Subject Matter. This report may not be suitable for any other purpose.
The procedures performed may not address all of the items of interest to a user of the report and
may not meet the needs of all users of the report and, as such, users are responsible for
determining whether the procedures performed are appropriate for their purpose. We make no
representation regarding the appropriateness of the procedures described below either for the
purpose for which this report has been requested or for any other purpose.
We performed certain procedures on earlier versions of the Subject Matter and communicated
differences prior to being provided the final Subject Matter which was subjected to the
procedures described below.
Capitalized terms used but not defined herein have the meanings ascribed to them in the
Supplement or the Base Offering Circular.
For purposes of this report, we have obtained:
VII-3-1
(a)
(b)
the Supplement; and
the attached listing of CUSIP Numbers from CUSIP Global Services for each Class of
Securities provided to us by, or on behalf of, the Sponsor (the “CUSIP Listing”).
In addition, using (i) the Modeling Assumptions[,] [and] (ii) Class Factors relating to each Class
of the Underlying Certificates obtained from Ginnie Mae’s website (the “Website”)][,] [and]
[(ii)] [(iii)] the terms of the Securities set forth in the Supplement, we have performed the
following procedures resulting in the associated findings described herein with respect to the
information set forth under each of the following captions in the Supplement.
Front Cover [and Schedule I] - Final Distribution Date:
[For each [HECM MBS] Trust Asset [on Exhibit A to the Supplement], we obtained the Issue
Date for such [HECM MBS] Trust Asset from [Ginnie Mae’s website (“the Website”)][the
Website]. We recomputed the Final Distribution Date for each of the Regular Classes [in
Security Group[s] [ ] [and [ ]]] as the Distribution Date in the month which is 600 months (50
years) after the latest Issue Date of the related [HECM MBS] Trust Assets. We compared each
such date to the Final Distribution Date for the related Regular Class shown in the table and
found them to be in agreement. [In addition,] [We][we] confirmed that the Final Distribution
Date for [(i) [the][each] Regular Class in Security Group[s] [ ] [and [ ]] has been set equal to the
[later of (a)[latest] Final Distribution Date of the Underlying Certificate[s] and (b)] the
recomputed final distribution date, which is the Distribution Date in the month which is 600
months (50 years) after the [latest] Issue Date of the Subgroup [] Trust Assets,] [[(i)] [(ii)]
[the][each] MX Class is the [latest] Final Distribution Date [for any] of its related REMIC
Securities and] [(ii)] [(iii)] [the][each] Residual Class is the [latest] Final Distribution Date [of
any] of the Regular Classes [in the related REMIC pool].
Front Cover [and Schedule I] - CUSIP Number:
For each Class of Securities, we compared the CUSIP Number shown in the table[s] to the
CUSIP Number for such Class shown in the CUSIP Listing and found them to be in agreement.
Page S-[ ] – Notional Class[es]:
Using the original Class Notional Balance of [the][each] Notional Class [(or portion thereof)]
[(other than Class[es] [ ] [and] [ ])], we recomputed the percentage of the initial outstanding
[principal][notional] balance of the [related] Trust Asset Group [or related Trust Asset Groups]
represented by [each] such Notional Class [(or portion thereof)]. [For Class[es] [ ] [and [ ]], we
recomputed the percentage of the initial outstanding principal balance of the related Class [or
Classes] and the percentage of the related Deferred Interest Amount [or Deferred Interest
Amounts, as applicable,] represented by [each] such Notional Class.] We compared such
recomputed percentage[s] to the corresponding percentage[s] in the table and found them to be in
agreement. [In addition, with respect to [each of] Class[es] [ ] [and []], we recomputed the sum
of the related portions of such Class Notional Balance shown in the table and found such amount
to be in agreement with the corresponding total shown in the table.]
VII-3-2
Page S-[ ] through S-[ ] - Decrement Tables:
We recomputed for each Regular Class [and MX Class] (i) the percentage of its [Original Class
Principal Balance (or] original Class Notional Balance[)] that would remain outstanding
following the distributions made on each of the Distribution Dates and at each of the PPC
Prepayment Assumption Rates [and[, if applicable,] at each constant level of [name of index or
indices used] [, as applicable]] indicated in the related table and (ii) its corresponding Weighted
Average Life. We compared such recomputed percentages and Weighted Average Lives to the
corresponding information set forth in the tables and found them to be in agreement.
Page S-[ ] through S-[ ] - Yield Table[s]:
Using the assumed purchase price[s] set forth in the yield table[s], we recomputed the pre-tax
yield to maturity (corporate bond equivalent) of [each][the] indicated Class at each PPC
Prepayment Assumption Rate [and[, if applicable,] at each constant level of [name of index or
indices used] [, as applicable]] shown in the related table. We compared such recomputed yields
to the corresponding yields shown in the related table and found them to be in agreement.
[Schedule I – Available Combinations:]
[Using the information for the exchange of Securities shown on Schedule I to the Supplement,
we proved the mathematical accuracy of the calculations which show that [(a) the aggregate
principal balance, if any, of the Securities so surrendered [plus the related Deferred Interest
Amounts] as of the Closing Date, if any, equals that of the Securities so received and (b)] the
aggregate monthly interest entitlement, if any, on the Securities received equals that of the
Securities surrendered.]
[Exhibit [C][D]: Underlying Certificate[s]
We recomputed the Approximate Weighted Average Gross Interest Rate of HECMs and
Approximate Weighted Average HECM Age (in months) on the HECMs underlying [each] [the]
Underlying Certificate using the corresponding information and the related HECM MBS
Principal Balance, [each] as shown in or derived from Exhibit [D][E] to the Supplement. We
compared such recomputed Approximate Weighted Average Gross Interest Rate of HECMs and
Approximate Weighted Average HECM Age (in months) to the corresponding information
shown in Exhibit [C][D] and found them to be in agreement. In addition, for [each] [the]
Underlying Certificate, we compared the Underlying Certificate Factor shown in Exhibit [C][D]
to the corresponding information obtained from the Website, and found them to be in agreement.
For [each] [the] Underlying Certificate, we recalculated the [Principal] [or] [Notional] Balance in
Trust by determining the product of (i) the Original Class [Principal] [or] [Notional] Balance, (ii)
Underlying Certificate Factor and (iii) the Percentage of Class in Trust and found such amount to
be in agreement. Lastly, for [each] [the] Underlying Certificate, we compared the Issue Date,
CUSIP Number, [Interest Rate] [(only with respect to the Group [ ] Trust Asset[s])], Interest
Type, Final Distribution Date, Principal Type and Original Class [Principal] [Notional] Balance
to the corresponding information set forth in the [related] Underlying Certificate Disclosure
VII-3-3
Document and found them to be in agreement. We have not performed any procedures relating to
the Percentage of Class in Trust and make no representations with respect thereto.]
Using the Modeling Assumptions and the terms of the Securities set forth in the Supplement and
assuming (i) the timely payment of principal and interest on the Trust Assets, (ii) that no taxes
are imposed on the Trust REMICs and (iii) that no expenses are incurred, we determined that
payments on the Trust Assets would be adequate to (a) make full and timely payments of
principal and interest on the Securities and (b) reduce the Class Principal Balance or Class
Notional Balance of each Class of Securities to zero by its Final Distribution Date, in each case
in accordance with the terms as set forth in the Supplement regardless of the rate of prepayments
or draws on the HECMs underlying the Trust Assets [or the level of [name of index or indices
used].
This agreed-upon procedures engagement was conducted in accordance with attestation
standards established by the American Institute of Certified Public Accountants (“AICPA”). An
agreed-upon procedures engagement involves the practitioner performing specific procedures
that the Engaging Party has agreed to and acknowledged to be appropriate for the purpose of the
engagement and reporting on findings based on the procedures performed. We were not engaged
to, and did not, conduct an examination or a review, the objective of which would be to express
an opinion or conclusion, respectively, on the Subject Matter. Accordingly, we do not express
such an opinion or conclusion. Had we performed additional procedures, other matters might
have come to our attention that would have been reported to you.
The procedures included herein were limited to comparing or recalculating certain information
that is further described herein. We have not verified, and we make no representation as to, the
accuracy, completeness or reasonableness of the Base Offering Circular or any other information
provided to us, or that we were instructed to obtain, by the Sponsor upon which we relied in
forming our findings. Accordingly, we make no representation and express no opinion as to (a)
the existence of the Trust Assets securing the Securities, (b) questions of legal or tax
interpretation; (c) the accuracy, completeness or reasonableness of any instructions, assumptions
or methodologies provided to us by the Sponsor that are described in this report; (d) the accuracy
of the information reported in the CUSIP Listing[,] [and] on the Website [and the Underlying
Certificate Disclosure Document[s]]; or (e) whether the actual payments on the Trust Assets and
the Securities will correspond to the payments calculated in accordance with the assumptions and
methodologies set forth in the Supplement or provided to us by the Sponsor as expressly noted
herein. Further, we have addressed ourselves solely to the foregoing data as set forth in the
Supplement and we make no representations as to the adequacy of disclosure or as to whether
any material facts have been omitted.
Furthermore, there will usually be differences between the actual payments on the Trust Assets
and the Securities as compared to the payments calculated in accordance with the assumptions
and methodologies set forth in the Supplement and described herein, because events and
circumstances frequently do not occur as expected, and those differences may be material. We
have no responsibility to update this report for events and circumstances occurring after the date
of this report.
VII-3-4
We are required to be independent of the Sponsor and to meet our other ethical responsibilities,
as applicable for agreed-upon procedures engagements set forth in the Preface: Applicable to All
Members and Part 1 – Members in Public Practice of the Code of Professional Conduct
established by the AICPA. Independence requirements for agreed-upon procedure engagements
are less restrictive than independence requirements for audit and other attestation services.
This report is intended solely for the information and use of the Specified Parties, in connection
with the offering of the Securities covered by the Supplement, and is not intended to be and
should not be used by anyone other than the Specified Parties. It is not to be used, circulated,
quoted or otherwise referred to for any other purpose, including but not limited to the purchase
or sale of the Securities, nor is it to be filed with or referred to in whole or in part in the
Supplement or any other document, except that reference may be made to it in the Sponsor
Agreement or in any list of closing documents pertaining to the offering of the Securities.
Yours truly,
[Accountant's Signature]
[Date of Accountant's Report]
VII-3-5
FORM OF ACCOUNTANTS’ AGREED-UPON PROCEDURES REPORT
AS OF THE CLOSING DATE FOR
HREMIC TRANSACTIONS
Independent Accountants’ Report on Applying Agreed-Upon Procedures
[Sponsor]
[Address]
Government National Mortgage Association
Office of Capital Markets
425 3rd Street S.W., 4th floor
Washington, DC 20024
Re:
Ginnie Mae REMIC Trust 20__-__ (the "[REMIC] Securities") [and Ginnie Mae MX
Trust 20__-__ (the "MX Securities" and together with the REMIC Securities, the
"Securities")]
We have performed the procedures enumerated below, related to certain information set forth in
a certain schedule, described herein, relating to the offering of the Securities on the Closing Date
(as defined in the Supplement, which is defined herein) (the “Subject Matter”). [Sponsor Name]
(the “Sponsor” or the “Engaging Party”) is responsible for the Subject Matter.
The Sponsor and Government National Mortgage Association (“Ginnie Mae” and together with
the Sponsor, the “Specified Parties”) have agreed to and acknowledged that the procedures
performed are appropriate to meet the intended purpose of evaluating the accuracy of certain
information related to the Subject Matter. This report may not be suitable for any other purpose.
The procedures performed may not address all of the items of interest to a user of the report and
may not meet the needs of all users of the report and, as such, users are responsible for
determining whether the procedures performed are appropriate for their purpose. We make no
representation regarding the appropriateness of the procedures described below either for the
purpose for which this report has been requested or for any other purpose.
We performed certain procedures on earlier versions of the Subject Matter and communicated
differences prior to being provided the final Subject Matter which was subjected to the
procedures described below.
We refer to our report to the Specified Parties dated [Print Date] (the “Print AUP Report”),
which describes the agreed-upon procedures performed relating to certain information contained
in the Supplement (as defined in the Print AUP Report) relating to the offering of the Securities.
Capitalized terms used but not defined herein have the meanings ascribed to them in the Trust
Agreement (as defined below) or in the Supplement. The procedures performed subsequent to
the procedures performed in the Print AUP Report and our associated findings are included
below.
For purposes of the procedures described in this report, the Sponsor provided us with:
VII-4-1
(a) The Supplement,
(b) The REMIC Securities trust agreement (the “[REMIC] Trust Agreement”)[ and][,]
(c) [The MX Securities trust agreement (the “MX Trust Agreement” and, together with the
REMIC Trust Agreement, the “Trust Agreement”) and]
(d) An electronic listing of the Trust Assets.
Based on the foregoing, we performed the following procedures:
1. [For each Trust Asset (other than the [Group [ ] and] Group T Trust Asset[s]), we
recomputed the aggregate Current Principal Balance for such Trust Asset as the sum of
[the product of (i) Percentage of Pool in Trust and (ii)] the HECM MBS Principal
Balance for each Payment Plan related to such Trust Asset shown on Exhibit A to the
Supplement (which is the responsibility of the Sponsor). We compared the Pool Number
set forth on Exhibit A to the Supplement and such recomputed aggregate Current
Principal Balance for each Trust Asset to the corresponding Pool Number and Current
Principal Balance included in the Trustee’s Receipt and Safekeeping Agreement
(attached hereto as “Schedule A”) provided to us by the Trustee and found them to be in
agreement. [We have been instructed by representatives of the Sponsor that for purposes
of our comparison, differences of less than $1.00 are deemed to be in agreement.]]
2. [For each [Group [ ]] Trust Asset [(other than the Group T Trust Asset[s])], we
compared the Series, Class, Issue Date, CUSIP Number, Final Distribution Date[, Interest
Rate[(only with respect to the Group [ ] Trust Asset[s]]] and [Principal] [or] [Notional]
Balance in Trust shown on Exhibit [C][D] to the Supplement, to the corresponding
information included in Schedule A and found them to be in agreement.] [We have been
instructed by representatives of the Sponsor that for purposes of our comparison,
differences of less than $1.00 are deemed to be in agreement.]
3. We recomputed the sum of the Current Principal [or Notional] Balances of the Trust
Assets in each Trust Asset Group [and Subgroup] shown on Schedule A (each, an
“Aggregate Balance”) and found each such amount to be in agreement with the
corresponding amount shown on Schedule A.
4. We determined that the Aggregate Balance for [the Trust Assets] [each Trust Asset
Group] (other than the Group T Trust Asset[s]) is not less than the aggregate Original
Class [Principal] [Notional] Balance of the Securities in the related Security Group.
Using the Trust Assets on Schedule A and the terms of the Securities set forth in the Trust
Agreement, and assuming (i) the timely payment of principal and interest on the Trust Assets,
(ii) that no taxes are imposed on the Trust REMICs and (iii) that no expenses are incurred (other
than the Trustee Fee), we determined that payments on the Trust Assets, net of any Trustee Fee,
would be adequate to make full and timely payments of [any applicable Deferred Interest
Amount] [principal] and interest on the Securities and the Pooling REMIC Subaccounts and to
reduce [any applicable Deferred Interest Amount and] the [Class Principal Balance or] Class
Notional Balance of each Class of Securities to zero by its Final Distribution Date, in each case,
VII-4-2
in accordance with the terms as set forth in the Trust Agreement regardless of the rate of
prepayments or draws on the HECMs underlying the Trust Assets [or the level of [name of index
or indices used]].
This agreed-upon procedures engagement was conducted in accordance with attestation
standards established by the American Institute of Certified Public Accountants (“AICPA”). An
agreed-upon procedures engagement involves the practitioner performing specific procedures
that the Engaging Party has agreed to and acknowledged to be appropriate for the purpose of the
engagement and reporting on findings based on the procedures performed. We were not engaged
to, and did not, conduct an examination or a review, the objective of which would be to express
an opinion or conclusion, respectively, on the Subject Matter. Accordingly, we do not express
such an opinion or conclusion. Had we performed additional procedures, other matters might
have come to our attention that would have been reported to you.
The procedure included herein was limited to comparing or recalculating certain information that
is further described herein. We were not requested to perform and we have not performed any
procedures other than those listed in the Print AUP Report with respect to the Supplement. We
have not verified, and we make no representation as to, the accuracy, completeness or
reasonableness of the Base Offering Circular or any other information provided to us, or that we
were instructed to obtain, by the Sponsor upon which we relied in forming our findings.
Accordingly, we make no representation and express no opinion as to (a) the existence of the
Trust Assets securing the Securities, (b) questions of legal or tax interpretation and (c) the
accuracy, completeness or reasonableness of any instructions, assumptions or methodologies
provided to us by the Sponsor that are described in this report. We undertake no responsibility to
update this report for events and circumstances occurring after the date hereof.
We are required to be independent of the Sponsor and to meet our other ethical responsibilities,
as applicable for agreed-upon procedures engagements set forth in the Preface: Applicable to All
Members and Part 1 – Members in Public Practice of the Code of Professional Conduct
established by the AICPA. Independence requirements for agreed-upon procedure engagements
are less restrictive than independence requirements for audit and other attestation services.
This report is intended solely for the information and use of the Specified Parties in connection
with the issuance of the Securities covered by the Trust Agreement and is not intended to be and
should not be used by anyone other than the Specified Parties. It is not to be used, circulated,
quoted or otherwise referred to for any other purpose, including but not limited to, the purchase
or sale of the Securities, nor is it to be filed with or referred to in whole or in part in the Trust
Agreement or the Supplement or any other document, except that reference may be made to it in
the Sponsor Agreement or in any list of closing documents pertaining to the issuance of the
Securities.
Yours truly,
[Accountant's Signature]
[Date of Accountant's Report]
VII-4-3
Office of Management & Budget publication number 2503-0030
| File Type | application/pdf |
| File Modified | 2023-07-26 |
| File Created | 2023-07-21 |