The National Reverse Mortgage Lenders Association (NRMLA) is making a push for Fannie Mae to once again begin purchasing reverse mortgages, and is urging that Freddie Mac be enabled to purchase Home Equity Conversion Mortgages as well.
The association made a request of the Federal Housing Finance Agency (FHFA) last week to the effect that the government-sponsored enterprises Fannie and Freddie be allowed to include reverse mortgages among the asset types the organizations purchase. NRMLA also noted the benefits of the reintroduction of a Home Keeper-like program similar to that of Fannie Mae’s proprietary reverse mortgage, and the importance of Fannie and Freddie being able to purchase proprietary reverse mortgages in the market.
Fannie Mae stopped purchasing reverse mortgages in October 2010 leaving Ginnie Mae as the sole HECM-backed mortgage securities (HMBS) issuer. At the time, Fannie Mae cited lack of infrastructure to handle multiple reverse mortgage product types, which at the time included the HECM standard and HECM Saver.
Reinstatement of Fannie Mae and introduction of Freddie Mac as a reverse mortgage purchaser should fall under the FHFA’s enterprise goals in the coming years, NRMLA wrote in comments that respond to a request from FHFA on Enterprise goals for the years 2015 to 2017.
“As America ages, and seniors continue to live longer, the shortfall in retirement savings may place a further strain on government programs, such as Social Security,” said NRMLA in its comments. “The financial planning community has begun to recognize this potential gap or shortfall in retirement savings and the possible further role that reverse mortgages might play for seniors that choose to utilize them.”
NRMLA notes further that the association believes the beginning of the decline in reverse mortgage volume in 2009 stems in part from Fannie Mae’s exit from the business.
“We feel strongly that a renewed role by the Enterprises in the reverse mortgage market would be welcomed, would greatly serve our national housing needs, and would be economically viable for the Enterprises,” NRMLA writes.
Written by Elizabeth Ecker