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Mortgage Company Addresses REMIC Eligibility of FHA-Backed Hospital Loans

AUG. 3, 2007

Mortgage Company Addresses REMIC Eligibility of FHA-Backed Hospital Loans

DATED AUG. 3, 2007
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From: Peter Wessel [ pwessel@amerisphere.net ]

Sent: Friday, August 03, 2007 8:15 PM

To: Novey, Michael

Cc: TED_B._FOSTER@HUD.GOV; jerry.gross@hud.gov; Davies, Katherine A; Roger_E._Miller@HUD.gov; karen.cady@credit-suisse.com; Mazer, Mike; Desmond, Michael; Baker Susan Thompson; Imholtz Diana

Subject: RE: REMIC-eligibility of FHA Section 242 insured hospital loans

Attachments: 2007.08.03 -- REMIC -- Novey letter.pdf

Please see attached letter.

Peter A. Wessel

 

Amerisphere Mortgage Finance,

 

L.L.C.

 

Denver, CO 80203-4357

 

August 3, 2007

 

 

VIA E-MAIL: Michael.Novey@do.treas.gov

Michael Novey

 

Associate Tax Legislative Counsel

 

US Department of the Treasury -- Room 1041A

 

1500 Pennsylvania Avenue NW

 

Washington, DC 20220

 

 

RE: REMIC-eligibility of FHA Section 242 insured hospital loans

Dear Mr. Novey:

Thank you for taking time earlier this week to meet with private and public sector representatives interested in promoting the REMIC-eligibility of FHA Section 242 insured hospital loans and Ginnie Mae mortgage pass-thru certificates collateralized by such loans ("FHA 242 Loans").

We appreciate the willingness you displayed in trying to resolve the current regulatory impediments to the REMIC-eligibility of FHA 242 Loans. It appears that we are all in agreement respecting public policy -- that it would be in the public interest to facilitate lower interest rates to hospital borrowers via the securitization of FHA 242 Loans in REMICS. How to best accomplish that objective remains the issue.

We discussed several options during our meeting, including: a) a regulatory change proposed by Ginnie Mae that all Ginnie Mae guaranteed financial instruments be deemed REMIC eligible, b) a proposal from an ad hoc task force of FHA approved mortgage bankers and REMIC sponsors of a regulatory carve-out for FHA 242 Loans, and c) a proposal from you of a possible safe harbor test at initial loan closing that would create a presumption of REMIC eligibility subject to a material change exception.

We believe that any solution must satisfy all of the following "guiding principles" which surfaced in our discussions:

 

1) Ginnie Mae needs uniformity, certainty and ease of determining compliance with REMIC regulations.

2) REMIC sponsors need to be able to accurately assess risk, so they can commit to pricing accordingly.

3) Mortgage bankers need to be free from risk of repurchase obligation or re-pricing due to REMIC eligibility once the loan is sold.

4) HUD needs flexibility to respond to hospitals' needs for loan restructuring without undue constriction.

5) Treasury needs to assure compliance with statutory authorization and Congress' intent.

6) Hospitals need certainty of execution at competitive rates and terms.

 

We also believe that the most expeditious way to achieve our objective is to reach agreement with the Department of Treasury on a regulatory solution. In any case, this is an issue that merits timely attention and we are interested in reaching closure with you.
Sincerely,

 

 

Peter A. Wessel

 

Chairman

 

Ad hoc FHA 242 REMIC Task

 

Force

 

Cc:

 

Ted Foster, Ginnie Mae

 

Jerry Gross, US Department of Housing & Urban Development

 

Katherine Davies, US Department of Housing & Urban Development

 

Roger Miller, US Department of Housing & Urban Development

 

Karen Cady, Credit Suisse First Boston

 

Michael Mazer, Committee on Healthcare Financing

 

Michael Desmond, US Department of the Treasury

 

Susan Baker, Internal Revenue Service

 

Diana Imholtz, Internal Revenue Service
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