Ginnie Plans Reverse-Friendly REMIC

Ginnie Mae is opening the door for issuers to combine single-family mortgage-backed securities with reverse mortgage securities in a new real estate mortgage investment conduit, which should give the agency's fledging HECM mortgage-backed securities program a boost. A Ginnie official said the new REMIC program will be ready in a few weeks and they are aiming to complete the first forward/reverse mortgage REMIC this summer. "We don't expect to see a deal until the summer," the official said. Back in September, Ginnie rolled out an MBS program for Federal Housing Administration-insured reverse mortgages, which are called Home Equity Conversion Mortgages, or HECMs. Only one HECM MBS transaction has been completed. But Ginnie executives say they expect the new H-Class REMIC to allow Wall Street to structure the cash flows so it is more attractive to investors and provide a better execution for HECM MBS issuers.