Ginnie Mae published its Fiscal Year 2023 Annual Report to highlight its programs and accomplishments from the past year, including steps taken to alleviate liquidity pressures that impacted issuers of HECM Mortgage-Backed Securities (HMBS).
What they’re saying: “While traditional mortgage lenders and issuers felt liquidity constraints in Fiscal Year 2023, the HMBS sector faced a uniquely acute set of challenges from this interest rate environment,” says Ginnie Mae.
- In response, Ginnie Mae reduced pool sizes to provide relief to smaller HMBS issuers and announced changes to the HMBS pooling system to permit issuers to securitize multiple tail participations.
Ginnie Mae also provided details of the first-ever seizure of an HMBS portfolio following the bankruptcy of Reverse Mortgage Funding in 2022.
“Upon seizure of the defaulted portfolio, Ginnie Mae assumed all obligations to the HMBS investors and all servicing responsibilities, stepping into the role of the issuer,” the annual report says. “At the Fiscal Year-end, Ginnie Mae’s Balance Sheet increased by over 50 percent primarily as a result of the RMF default.” Read the full report.