Joined at the hip: The need for private capital in mortgage lending

by Shannon Hicks
| One Comment
| January 28, 2013

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The American mortgage market is surgically attached to the Federal government. A recent hearing on The Private Mortgage Market Investment Act exposed just how entrenched and dependent mortgage lending has become on Uncle Sam.

It’s the Golden Rule. He with the gold, makes the rules and that’s what the federal government has done. In the wake of the housing collapse and mortgage meltdown Uncle Sam is telling mortgage lenders the free lunch is over. Obviously Home Equity Conversion Mortgage program is exclusively a federally guaranteed product. For our industry private capital…

Editor in Chief: HECMWorld.com

As a prominent commentator and Editor in Chief at HECMWorld.com, Shannon Hicks has played a pivotal role in reshaping the conversation around reverse mortgages. His unique perspectives and deep understanding of the industry have not only educated countless readers but has also contributed to introducing practical strategies utilizing housing wealth with a reverse mortgage.

Shannon’s journey into the world of reverse mortgages began in 2002 as an originator and his prior work in the financial services industry. Shannon has been covering reverse mortgage news stories since 2008 when he launched the podcast HECMWorld Weekly. Later, in 2010 he began producing the weekly video series The Industry Leader Update and Friday’s Food for Thought.

Readers wishing to submit stories or interview requests can reach our team at: info@hecmworld.com.

1 Comment

James E. Veale, CPA, MBT
January 28, 2013 at 9:15 am
Without government insurance, the only security a lender has is home value unless of course private insurance companies step in with reasonably priced insurance (very, very doubtful for now). Based on recent history reverse mortgages are very high risk investments demanding lower risk (lower percentage of proceeds to value) and/or higher interest rates.

After the elimination of fixed rate Standards, HECM borrower behavior (number/percentage of maximum draws within one year following funding) will dictate if principal limit factors need to be lowered.
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