Ginnie Mae is going ahead with a new program to guarantee pools of reverse mortgages insured by the Federal Housing Administration, known as home equity conversion mortgages, and create an accrual mortgage-backed security that will not have a payment schedule."We are confident the Ginnie Mae security will foster a robust secondary market for reverse mortgages," Ginnie President Robert Couch said at a news conference announcing the HECM MBS program. Ginnie Mae and its supporters say they expect the MBS program to increase the availability of HECMs and reduce origination costs to make the reverse mortgages a better deal for senior citizens. However, investors in the federally guaranteed HECM MBS will not receive payments of principal and interest until the borrowers leave their home or die, or the payouts on the HECM loan reach 98% of the claim amount. The Ginnie president added that his agency, as well as lenders and servicers, has to make "a lot of system changes" to issue HECM securities. It could take until next summer to do the first deal, he said. Ginnie Mae can be found online at http://www.ginniemae.gov.
