Even as government officials (HUD and the FBI being the latest) continue to issue warnings to seniors about reverse mortgage scams, and some practitioners worry about sudden exits by companies like Senior Lending Network, others see more than a few opportunities in the sector.
Rumors have circulated that Ginnie Mae was limiting their HMBS issuances and withdrawing previous authority to certain issuers while not accepting any new ones, especially in the wake of the SLN developments.
But, speaking on background, one Washington insider tells RMD there is confusion about HMBS funding and that while demand for reverse mortgage funding this year is particularly heavy, government guarantors such as Ginnie Mae will have sufficient budgetary authority to meet it.
A Ginnie Mae spokesperson adds emphatically: “We do not have a limit on the level of HMBS securities we will issue for the year, nor is there a limit on new issuers we will accept.” Total HMBS issuance for FY’08 was $1,159,221,127, she said. Thus far, in this fiscal year (October 2008 – June 2009) that issuance amount already has been higher, at $1,602,761,822.
One private investor active in the space, told RMD: “Ginnie Mae issuance is strong and [execution is] getting stronger,” noting that its increasing vigor “will bring a lot of people into the business.” This person offered an upbeat assessment of secondary market liquidity for reverse mortgages, describing it as having “improved dramatically” as of late and noting that “Wall Street is becoming more interested in securitizing HECM product and [more] lenders are coming in to provide warehouse lines.” This person, whose investment firm will announce a new acquisition shortly, lauded creativity in the secondary markets and “recognition that [reverse mortgages] are a great asset to hold.”
Neil J. Morse has been a communications professional working in the mortgage finance industry for more than a decade, currently specializing in the reverse mortgage sector. He can be reached at firstname.lastname@example.org