The National Reverse Mortgage Lenders Association (NRMLA) and the Mortgage Bankers Association (MBA) have jointly submitted a letter to Ginnie Mae acting president Sam Valverde, sharing their insights on the proposed supplemental Home Equity Conversion Mortgage (HECM)-backed Securities (HMBS) program.
Known as “HMBS 2.0” in the industry, the program was first announced earlier this year and a term sheet outlining its provisions was released in June. The letter commended Ginnie Mae for developing the program in response to the liquidity challenges following the 2022 failure of Reverse Mortgage Funding (RMF). NRMLA and MBA hope that their input will help strengthen and clarify key aspects of HMBS 2.0.
The letter recommended a 100% pooling maximum participation rate with a 5% risk retention requirement to align the new program with existing HMBS provisions and Dodd-Frank Act standards. It also proposed updates to the Ginnie Mae MBS guide and pool certification requirements to enhance transparency and operational efficiency.
MBA expressed optimism about HMBS 2.0’s potential to alleviate liquidity constraints for issuers by enabling the pooling of HECMs within specific balance ranges. The organizations encouraged continued feedback from HMBS Issuers to shape the program effectively.
NRMLA President Steve Irwin highlighted the dedication of Ginnie Mae to the HECM program amid resource constraints, emphasizing the importance of collaboration in refining HMBS 2.0. Ginnie Mae’s efforts to manage the former RMF servicing portfolio have strained its resources, necessitating additional staffing and funding.
As Ginnie Mae navigates the approval process for additional funds from Congress, the industry remains hopeful for the positive impact of HMBS 2.0 on liquidity and taxpayer protection.
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