Ginnie Mae HECM MBS Issuance Up Over 600% in 2009

The Government National Mortgage Association (GNMA) guaranteed a record $1.598 billion of reverse mortgage MBS (HMBS) in December, bringing 2009 issuance to $8.538 billion.

Ginnie Mae’s HMBS volume is up 629% compared to the $1.357 billion issued in 2008. 

Reverse mortgage lenders started turned to Ginnie Mae last year after Fannie Mae drastically adjusted its pricing strategy and are showing no signs of turning back as investor demand continues to increase.  In fact, “There really isn’t enough supply,” said David Fontanella of Knight Libertas at the National Reverse Mortgage Lenders Association Annual conference late last year.  

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With more reverse lenders waiting for Ginnie Mae approval to issue HMBS, volume in 2010 should continue to climb.

Chart: Ginnie Mae HMBS 2009

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  • Just lost a borrower who didn’t want to pay $20k in closing cost to refinance a $100k mortgage, as his home was worth more than the $625,500. With high demand for fixed rate mortgages, why doesn’t the FHA offer a program where they only tie up a portion of their equity (eg, $250k)? This would lower the closing costs and offer more equity protection to the lender. An alternative suggestion is to have a fixed rate on the initial draw (UPB, whatever that TLA stands for), and a variable rate on any balance in a credit line.

  • Just lost a borrower who didn't want to pay $20k in closing cost to refinance a $100k mortgage, as his home was worth more than the $625,500. With high demand for fixed rate mortgages, why doesn't the FHA offer a program where they only tie up a portion of their equity (eg, $250k)? This would lower the closing costs and offer more equity protection to the lender. An alternative suggestion is to have a fixed rate on the initial draw (UPB, whatever that TLA stands for), and a variable rate on any balance in a credit line.

  • Just lost a borrower who didn’t want to pay $20k in closing cost to refinance a $100k mortgage, as his home was worth more than the $625,500. With high demand for fixed rate mortgages, why doesn’t the FHA offer a program where they only tie up a portion of their equity (eg, $250k)? This would lower the closing costs and offer more equity protection to the lender. An alternative suggestion is to have a fixed rate on the initial draw (UPB, whatever that TLA stands for), and a variable rate on any balance in a credit line.

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