Unfortunately, I think that some of the mid-size originator's barriers to entry on the GNMA program – as it currently exists – will prevent widespread utilization of this program.

It's a great program, but what most originators don't realize is the level of “back-end” risk that Fannie Mae has always taken on with loans that are sold to them. In a GNMA program, the originator takes on that risk – and has to price the GNMA security to account for it.

You raise a good point regarding the substantial risks that remain with the issuer/originator in the GNMA execution. But realistically, there are still very few originators in the reverse mortgage market that fund their own deals anyway, and for most of those the liquidity and economic risks are likely manageable, provided they understand those risks.rnrnIn our experience working with issuers, there is a fairly wide range of expectations regarding the key risk variables, which is generating a significant amount of the volatility we’re seeing in the secondary marketplace today. Our expectation is that as we gather additional data this would settle out and become more normalized and manageable – which is why we’re building the first industry data repository for reverse mortgages to provide unbiased, comprehensive data to the industry and all interested parties.