Ginnie Mae has confirmed it seized and transferred servicing from the bankrupt Reverse Mortgage Funding without disrupting consumers the company had been working with.
The transfer “was accomplished without negatively impacting borrowers,” according to Ginnie, which also noted that it is “committed to supporting all government mortgage programs,” including home equity conversion mortgages.
These statements are significant because they address concerns about potential servicing concentration risk linked to the specialized loans, which aim to help seniors tap equity while living in their homes.
A relatively small group of subservicers tend to HECMs, and Ginnie’s need to seize servicing has raised questions about whether this would affect borrowers or investors. Ginnie, an arm of the Department of Housing and Urban Development, backs loans the Federal Housing Administration insures after securitization.
In other news, Ginnie also reported recently that it has largely aligned its standards for electronic promissory notes with those of government-sponsored enterprises Fannie Mae and Freddie Mac.
The synchronization, effective Jan. 1, 2023, could provide additional momentum to the use of digital collateral this year.
“In an effort to create alignment and efficiency in the digital mortgage transaction, adoption of the GSE standard clauses helps create a more simplified and efficient process for eIssuers,” Ginnie Mae President Alanna McCargo said in a press release.
The effort builds on Ginnie’s earlier efforts to encourage the use of electronic notes. Last June, it opened its digital collateral program up beyond a limited group of companies piloting the technology to all entities issuing its mortgage-backed securities.
