Ginnie Mae Responds to Liquidity Risks in Reverse Mortgage Securitizations

Ginnie Mae has announced All-Participants Memorandum (APM) to reduce the minimum pool size for Home Equity Conversion MBS, commonly known as reverse mortgages. By reducing the minimum size from $1M to $250K, Ginnie Mae hopes to decrease the time that issuers must carry balances between the reverse mortgage loan’s disbursement and its securitization, relieving liquidity pressure. The announcement comes after the 2022 bankruptcy of a large reverse mortgage originator, along with rising interest rates and other economic headwinds that could continue to pressure liquidity.

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