Companies
In their recent article for Reverse Mortgage Daily, Gate House Partners Keith Becker, Dror Oppenheimer, and Michael Marshall discuss the pressures in the housing finance market relative to reverse or home equity conversion mortgages (HECMs), suggesting action is needed to avoid further failures of Ginnie Mae HECM servicers and issuers.
If reverse servicers and “issuers” are a liquidity lifeline soon, the authors opined, “there could be additional failures, with Ginnie Mae and possibly, taxpayers holding the bag. Further harm can be avoided if Ginnie Mae provides support and the Federal Housing Administration (FHA) makes some critical changes to its HECM rulebook.”
Gate House illuminates the challengers facing HECM servicers and issuers as a result of both the rapidly rising interest rate environment and esoteric HUD policies that differ from the GSEs, for example, the fact that Ginnie Mae issuers are required to fund the buyout of “due and payable” loans, often for a period of two to three years, and advance tax and insurance payments when the loans are bought out of pools.