Ginnie Mae is evaluating its minimum net worth requirements for approved issuers. It has also suspended accepting new applications for issuers of securities backed by reverse mortgages.
The government-owned corporation suspended its approval of any new HMBS issuers, Robert Fishman, chief risk officer, said in an interview with MortgageDaily.com.
HMBS are government-guaranteed mortgage-backed securities filled with home-equity conversion mortgages.
The suspension will continue until Ginnie completes a review of the program and ensures that it has”all the right controls and requirements in place.”
Fishman explained that the move was, in part, prompted by the Federal Housing Administration’s final rule raising liquid asset and net worth requirements for approved mortgagees — including reverse mortgage lenders.
In addition, HMBS volume has grown over the past several months — and Fishman felt the agency needed to step back, evaluate the business and reconsider approval requirements.
The executive said that since he started at Ginnie Mae six months ago, he has initiated a series of Ginnie Mae program reviews to ensure the right controls are in place for the risks involved.
“We are at the same time undertaking reviews of other issues that are on the table besides just the HECM program,” Fishman stated. “I’m also looking more generically across the board at our net worth and liquid asset requirements, again, in light of the recent FHA changes.”
