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Reverse Mortgages: Ginnie Mae Program Now Includes One of the Nation's Top Reverse Mortgage Lenders
By Government National Mortgage Association (Ginnie Mae)
Terry Carr
(202) 708-0926
http://www.ginniemae.gov
For Immediate Release
March 26, 2008
Financial Freedom Joins Ginnie Mae's Reverse Mortgage Securitization Program Ginnie Mae Program Now Includes One of the Nation's Top Reverse Mortgage Lenders
Washington, DC – Today, the Government National Mortgage Association (Ginnie Mae) announced that Financial Freedom, a subsidiary of IndyMac Bank, F.S.B and a leading reverse mortgage lender, is a new issuer under Ginnie Mae's Home Equity Conversion Mortgage (HECM) Mortgage-Backed Securities (HMBS) program.
"We are pleased to welcome one of the top reverse mortgage lenders to our HMBS program," said Thomas R. Weakland, Acting Executive Vice President of Ginnie Mae. "Their inclusion as an issuer will greatly enhance the growth of our program. Creating a reverse mortgage securitization product that is attractive to top reverse mortgage lenders was our primary goal when we developed the security."
The Ginnie Mae HMBS provides the mortgage-backed securities marketplace with the only full faith and credit vehicle and the only standardized structure for the securitization of FHA-insured reverse mortgages. The HMBS, an accrual coupon pass-through bond, simplifies the current structure of reverse mortgage securitizations and maximizes value for reverse mortgage lenders and borrowers. The HMBS allows issuers to securitize the initial loan draw, subsequent loan draws, the mortgage insurance premium, servicing and guarantee fees, and receive market pricing on the entire loan amount. Issuers only need to pass through payments to investors as homeowners pay off the loan. Before the HMBS, reverse mortgage lenders only received a premium on the initial loan draw, and investors reimbursed the lender on subsequent loan draws, dollar for dollar.
"Ginnie Mae's full faith and credit backing of the HMBS, coupled with a standardized securitization structure, will expand our ability to provide consumers with safe, reliable reverse mortgage products," said Michelle Minier, CEO of Financial Freedom. "Increasing liquidity will also help us lower interest rates for borrowers. We believe the Ginnie Mae HMBS will have a positive impact on the reverse mortgage market. A securitization vehicle for HECM loans is long overdue."
Ginnie Mae is a wholly-owned government corporation within the U.S. Department of Housing and Urban Development. Ginnie Mae pioneered the mortgage-backed security (MBS), guaranteeing the very first security in 1970. A MBS enables a mortgage lender to aggregate and sell mortgage loans as a security to investors. Ginnie Mae securities carry the full faith and credit of the United States Government, which means that, even in difficult times, an investment in Ginnie Mae is one of the safest an investor can make.
