Reverse Mortgage-Backed Ginnie Mae Securities Rise to $1.47 billion

Last month saw the rise of Ginnie Mae securities, backed by reverse mortgages, to over $1 billion. This is the second time in just two years in which the Government-Sponsored Enterprise has reported such a surge. This was an outstanding month for investors focusing on reverse mortgage securities.

Home Equity Conversion Mortgages (Reverse Mortgages) backed Ginnie Mae securities totaling $1.47 billion in February of 2018. This number was up over half a billion dollars from $869 million the month before. Both numbers are up from the $713 million reported in February of 2017. The last time this number rose above the billion dollar mark was in December of 2017, when it hit a staggering $1.35 billion.

While many would think this to be great news, financial services advisory firms are warning people to cool their jets. It is important to note that principal limit factors are currently slowing down origination volume. The principal limit factors are set by HUD, and HUD altered the rules surrounding PLFs last October in order to tighten limitations on the HECM program. So, this recent spike in volume is a reflection of a rush of lenders attempting to originate more HECMs before these new regulatory changes occurred last October. But the fact remains that reverse mortgage value remains a huge driving force behind government-sponsored agencies, and also financial investment markets.

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