Ginnie Mae published a finalized term sheet for its HECM Mortgage-Backed Securities (HMBS) 2.0 program.
The final term sheet was developed in response to comments received and subsequent engagement with NRMLA and other stakeholders, as part of a public comment period following the release of the draft term sheet in June.
Why It Matters: The primary objective of HMBS 2.0 is to mitigate Issuers’ liquidity stress when HECMs bought from HMBS pools cannot be immediately assigned to the Federal Housing Administration because of incomplete documentation, a borrower in default status, or the property is in disrepair.
What They’re Saying: “The finalized HMBS 2.0 term sheet demonstrates Ginnie Mae’s commitment to providing innovative solutions for the reverse mortgage industry,” said Acting President Sam Valverde. “This program will facilitate much-needed liquidity for Issuers while improving the stability of the government-backed reverse mortgage market. As my final major initiative at Ginnie Mae, I am proud to see the critical policy work completed.”
Dig Deeper: Under the proposal, active and nonactive HECM buyouts with an outstanding principal balance of no less than 98 percent and no greater than 148 percent of the Maximum Claim Amount would be eligible for pooling into new custom, single-issuer pools subject to meeting additional individual loan requirements.
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NRMLA President Steve Irwin added: “I would like to applaud the tremendous effort of GNMA in getting this Term Sheet finalized, and the strong work of the NRMLA HMBS Issuer Committee in its collaborative effort to provide industry-wide feedback to the GNMA RFI’s on this matter. I would also like to mention that it is now imperative that GNMA, Issuers, Servicers and Subservicers focus their attention on getting this critically important program implemented.”
