Urban Financial Group is the first lender to receive its Ginnie Mae HMBS issuer approval after the agency lifted the moratorium at the end of last year. The addition of Urban brings the total number of approved HMBS issuers to 10 according to a Ginnie Mae spokesperson.
Earlier this year, GNMA increased net worth requirements for HMBS issuers five fold. While the increase puts becoming an issuer out of reach for most in the industry, Urban has no problem meeting the new requirements with Knight Capital Group’s backing. As an issuer, Urban gains more control over the origination process and additional revenue by going directly to investors, instead of relying on a third party to issue the securities.
Knight’s management team has said the HMBS program has become “the product of choice” for several of its bank, asset money managers and insurance company clients. As Urban continues to grow its retail and wholesale platforms, the more production Knight can use to meet the needs of its institutional clients.
The company should also get a boost when the acquisition of Guardian First Financial Group is complete. Expected to close in early 2011, the deal provides Urban with direct to consumer retail call center as well as the Robert Wagner brand.
Urban was the sixth largest reverse mortgage lender in 2010 and has become one of the top five lenders in 2011 according to recent data from Reverse Market Insight.Print Article