Ginnie Mae Exploring New HECM Mortgage-Backed Security Product

On January 16, 2024, Ginnie Mae announced that, as part of its efforts to enhance and expand its HECM mortgage-backed securities (HMBS) program, it is exploring options for developing a new HMBS product.

Specifically, Ginnie Mae noted that “[i]n light of continued liquidity constraints in the reverse mortgage sector,” it is exploring the development of a new HMBS product “that would accept HECM loans with balances above 98 percent of FHA’s Maximum Claim Amount (MCA).” It is important, however, to note that the new securitization product will not change the requirements for the existing HMBS program, which requires HECMs with balances that are at or above 98% of the MCA to be bought out of HMBS pools.

Ginnie Mae President Alanna McGargo stated that “[t]his potential product exploration reflects [Ginnie Mae’s] focus on current liquidity issues affecting the secondary mortgage market[,]” and that “continued efforts to provide stability in the secondary market are crucial to the ongoing health and access to the FHA HECM product.”