Ginnie Mae is actively assessing the potential for a novel securitization product aimed at enhancing the scope of its Home Equity Conversion Mortgage (HECM) mortgage-backed securities (HMBS) program, the agency announced recently.
In response to persistent liquidity challenges in the reverse mortgage market, the proposed securitization product would accommodate HECM loans exceeding 98% of the FHA’s Maximum Claim Amount (MCA), without altering the current requirements of the HMBS program, which necessitate the buyout of loans at or above this threshold.
“Ginnie Mae is dedicated to the HMBS program as a vital resource that allows seniors to leverage their home equity,” stated Ginnie Mae President Alanna McCargo. “This exploration into a potential new product is a reflection of our commitment to addressing the liquidity issues that are prevalent in the secondary mortgage market. As the demographic of older Americans increases, and more rely on home equity for financial support, it’s imperative to sustain market stability to ensure continued access to the FHA HECM product.”
Further showcasing its activity, Ginnie Mae reported that its MBS portfolio reached a milestone of $2.52 trillion in December 2023, with a total MBS issuance of $28.7 billion in the same month, contributing to a net growth of $13 billion.
Ginnie Mae’s issuance in December supported the financing of approximately 95,000 households, over half of which were first-time homebuyers. The bulk of the issuance, 76.3%, was allocated to new mortgages, reflecting a significant emphasis on home purchasing amid reduced refinancing activities due to elevated interest rates.
For the year 2023, the agency has supported the securitization of over 620,000 loans for first-time homeowners.
Additionally, Ginnie Mae has published its Annual Financial Report for fiscal year 2023, which underscores its financial achievements and operational highlights. “I am particularly proud of our financial outcomes and the significant influence we’ve had on millions of American families, even amidst a tough housing market,” McCargo commented. “The Annual Report underscores our commitment to managing a complex array of risks and challenges effectively, ensuring continued growth and precision in our operations.”
The report also details the strategic advances and the robust risk management, governance, and operational discipline that are central to the ongoing stability and success of the Ginnie Mae programs, benefiting issuers, investors, and American taxpayers alike.
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