Secondary Marketing Executive recently published “Reverse Mortgages: The Campaign For Hearts And Minds and the article provides great insight to some of the struggles our industry is facing. Phil Hart writes about the large number of mortgage bankers interested in the product but the greatest challenge to date is still convincing the general public and the investor community of the product’s value.
“If you look at the demographic trends and you look at what’s on the horizon for this industry, it is only a good picture to look at,” said Justin Birch, senior mortgage banking analyst for Ginnie Mae. Birch was among the panelists for the session “Reverse Mortgages – Outlook for Industry” at the recent Mortgage Bankers Association Secondary Marketing Conference, and he noted the government-sponsored enterprise was fully behind the product and its investment potential.
Birch acknowledged that Ginnie Mae’s timing was somewhat off when it unveiled their HECM security but he noted, “Our goal is to create a standardized product,” he said of Ginnie Mae’s home equity conversion mortgage (HECM) securities. “We wanted to do three things: we wanted to improve the liquidity for the product, we wanted to expand the seniors’ borrowing options, and we wanted to lower the costs for seniors.”
The article also discusses the jumbo reverse mortgage market and the opportunity and challenges it presents. Waqas Shaikh, a director with Standards & Poor’s pointed out that unlike Fannie Mae and Freddie Mac, Ginnie Mae does not have the capacity to securitize jumbo loans. “It’s really attractive for borrowers who have higher-priced loans and would like to borrow amounts that are greater than the HECM loan limits,” he said.
Overall the article is a good read, I encourage everyone to check it out at the link below.
Reverse Mortgages: The Campaign For Hearts And Minds
Technorati tags: Reverse Mortgage, HECM, Ginnie Mae. Mortgage, News
