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Ginnie Mae has announced that it is exploring the development of a new securitization product as part of its effort to enhance and expand its existing Home Equity Conversion Mortgage (HECM) mortgage-backed securities (HMBS) program.
In light of continued liquidity constraints in the reverse mortgage sector, Ginnie Mae is exploring the viability of a new securitization product that would accept HECM loans with balances above 98% of FHA’s Maximum Claim Amount (MCA). This new product will not change the requirements for the existing HMBS program, where HECM loans with balances at or above 98% MCA are required to be bought out of HMBS.
“Ginnie Mae remains committed to the HMBS program, which supports an important tool that enables seniors to tap into their home equity,” said Ginnie Mae President Alanna McCargo. “This potential product exploration reflects our focus on current liquidity issues affecting the secondary mortgage market. Given the growing population of older Americans that may need to rely on home equity for financial support, continued efforts to provide stability in the secondary market are crucial to the ongoing health and access to the FHA HECM product.”
Ginnie Mae’s recently announced that its MBS portfolio outstanding grew to $2.52 trillion in December 2023, including $28.7 billion of total MBS issuance, leading to $13 billion of net growth.
December’s new MBS issuance by Ginnie Mae supported the financing of nearly 95,000 households, including more than 47,000 first-time homebuyers. Approximately 76.3% of the December MBS issuance reflects new mortgages that support home purchases because refinance activity remained low due to higher interest rates.
For the 2023 calendar year to date, Ginnie Mae supported the pooling and securitization of more than 620,000 first-time homebuyer loans.
In addition, Ginnie Mae also recently issued its Annual Financial Report for fiscal year 2023, highlighting its financial performance and accomplishments from the past year, During FY 2023, Ginnie Mae supported more than 1.2 million households, including underserved communities, first-time homebuyers, servicemembers, and veterans. MBS issuance topped $404 billion, and the Ginnie Mae MBS outstanding reached $2.476 trillion.
“I am impressed with our financial results and the incredible impact Ginnie Mae has had on millions of American households, even in the face of a challenging housing market,” added McCargo. “As the Annual Report shows, we continue to manage an incredibly complex program, numerous risks, and continued growth with strength and precision, and we are managing a number of emerging risks in the housing market with incredible efficiency. I am very proud of our outstanding team for continuously delivering results for the American people during a time when housing affordability has been greatly challenged.”
The 2023 Annual Financial Report demonstrates the progress made toward the strategic plan and, more importantly, the strong risk management, governance, and operational discipline that ensures the Ginnie Mae program continues to deliver strong and stable results for issuers, investors, and American taxpayers.
