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The “Exit Effect”

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That is the supply of approved Ginnie Mae issuers of HECM Mortgage Backed Securities or HMBSs. Today we are only supported by 18 issuers with only about one quarter actively issuing HMBS.

Speaking of issuers the process of becoming one is not for the feint of heart. They must have $5 million dollars plus and an additional 1% of the aggregate amount of their outstanding principal balances. In addition they must have liquid assets that exceed the net worth requirement by 20%. Few companies have such flush balance sheets which makes issuers an elite group.

 

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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.

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3 Comments

  1. Our present endorsement levels are not indicative or a growing or even stagnant market. On the other hand, they are putting pressure on Ginnie Mae HECM issuers either.

    With fiscal 2013 looking like another poor endorsement year, there is time for the issuers to catch up to endorsement activity. Will fiscal 2014 be the year we see endorsement levels once again above 73,000? We have a long way to go before then. This is no time to panic, just more drop in volume over time as we hit our proverbial floor.

    Enjoy San Antonio!!!

  2. Great article on the exit effect of the large national lenders leaving a void in the RM market and agree with your points that the high capital requirements are scaring many new entrants.

    However, in my opinion, the financial requirements are only a small part of the problem. It is the uncertainty with the new lending regulations flowing out of the Dodd-Frank legislation and the CFPB.

    We desperately need more lenders. However, I do not think we will see many new players enter the market.and until issues such as QM, the Disparate Rule, et al are settled.

    • Mr. Booth,

      Is it more lenders, more HMBS Ginnie Mae issuers, or more of both? I am not so sure the QM rules are that scary since HECMs are FHA insured.


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