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SIFMA Publishes Revisions to Good Delivery Guidelines, Settlement Recommendation for Jumbo-Conforming Pools

Publication of Revised “Good Delivery Guidelines”

New York, NY, March 20, 2008 - Today SIFMA published a revision to the Good Delivery Guidelines for TBA MBS trading (Chapter 8 of the Uniform Practices Manual). The revisions to the guidelines more explicitly define the characteristics of the “standard” loans which are acceptable for inclusion in TBA-eligible MBS pools and reflect SIFMA’s decision that jumbo-conforming mortgages should not be included in TBA-eligible pools. Concurrently, the revisions implement modifications to the “non-standard” loans section to codify existing market practice and further delineate which non-standard loan products are eligible for de-minimus inclusion in TBA-eligible pools.

As previously stated, SIFMA's decision to make jumbo loans non-TBA eligible was viewed as the most expeditious and least disruptive option currently available to facilitate securitization and secondary market activity for the higher balance loans, bringing added liquidity and rate relief to higher balance loan borrowers, while not imposing additional costs or impairing the liquidity for loans falling within the pre-existing loan limits

The updates to the manual are available here for subscribers.

The Manual is available for purchase here.

Settlement Recommendation for Conforming-Jumbo Pools:

New York, NY, March 20, 2008 - SIFMA recommends that securities containing Conforming-Jumbo loans settle on the class settlement date used for securities most similar to the specific conforming-jumbo product involved.

Class A - 30 yr fixed rate FNMA, FHLMC jumbo-conforming pools

Class B - 15yr fixed rate FNMA, FHLMC, GNMA jumbo-conforming pools

Class C - 30 yr GNMA jumbo-conforming pools

Class D – ARMs jumbo-conforming pools

Nothing in this recommendation should bind parties to a trade; counterparties may choose to settle on any other date as they see fit.

More information on settlement dates may be found at SIFMA's settlement dates page.

Please contact Sean Davy (sdavy@sifma.org, 212-313-1126) or Chris Killian (ckillian@sifma.org, 212-313-1126) with any questions or comments.

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Revised MBS Good Delivery Guidelines - Important Change Effective March 1, 2006

Revised “Good Delivery Guidelines,” found in Uniform Practices Chapter 8, were published in December 2005.  One important change will be effective on Wednesday, March 1:  the coupon rate at or above which 5 pools may be delivered per million of a TBA trade will be lowered from 11% to 8% .  This change will be effective for trades executed on or after December 15, 2005, and settling after March 1, 2006.  Please contact Chris Killian at 646-637-9226 or ckillian@sifma.org for more information.

Good Delivery Guidelines for Bankers' Acceptances - published: 1-Jan-98
Guidelines (pdf)