Silvergate Bank today announced it has received approval from Ginnie Mae to issue HMBS reverse mortgage securities. It plans to issue its first Ginnie Mae HMBS security in September 2012.
Silvergate, which recently touted the performance of its held-for-sale reverse mortgage portfolio has not released any additional information about its plans for its reverse mortgage business. However, the approval to become an HMBS issuer will allow it to further diversify its banking activities, the company said Tuesday.
“Obtaining Ginnie Mae HMBS Issuer approval has been an important objective for us since entering the reverse mortgage lending business late last year to take advantage of market opportunities and to provide further diversification for Silvergate Bank beyond our core business banking activities,” said Alan J. Lane, the bank’s president and CEO. “Our approval by Ginnie Mae after a comparatively brief application period enhances our ability to build on the progress we have already achieved this year in increasing our acquisitions and sales of HECM loans.”
The La Jolla, Calif.-based company’s record earnings announced in August were attributed in large part to its growing portfolio of reverse mortgages. The bank acquired nearly $50 million in Home Equity Conversion Mortgages (HECMs) in the second quarter. It released similar results in the first quarter.
Written by Elizabeth Ecker