Secondary Markets

This article links to presentations on the HMBS securities market presented at the 2011 Annual Meeting & Expo.

Ginnie Mae published APM 2011-10, implementing a new servicing fee margin for HECM Mortgage-Backed Securities.

Ginnie Mae published a memorandum on March 24 reiterating the fact that Ginnie Mae Issuers must purchase HECM loans out of HMBS loan pools when the outstanding principal balance reaches or exceeds 98% of the maximum claim amount.

Effective immediately, Ginnie Mae is increasing the base net worth requirement for HECM Mortgage-Backed Securities (HMBS) issuers from the current $1 million base net worth requirement to $5 million.

For 20 years, a void has existed in the reverse mortgage marketplace, a data void that has hindered efforts to build an investor base, enhance public relations, and develop better policies.

For 18 years, FHA’s Home Equity Conversion Mortgage was a financial rocket sitting on a launching pad without adequate fuel. Now, Ginnie Mae’s new HMBS is the fuel that will propel the program into the orbit of aging finance.

Let’s face it: You need capital to grow your reverse mortgage business. Unless you have wealthy friends and family, you need Wall Street, and Wall Street needs a hot industry, aka reverse mortgages.

In preparation for launching its HECM Mortgage-Backed Securities program in September, Ginnie Mae has published a 79-page reference guide for interested parties to learn the program rules and requirements.