Ginnie Mae Confirms Support for Reverse

When Ginnie Mae’s President Alanna McCargo affirmed her agency’s support for Reverse Mortgage lending at this fall's National Reverse Mortgage Lenders Associations (NRMLA’s) conference, it might have caught some new reverse mortgage lenders by surprise.

It was certainly not a surprise to the veteran reverse mortgage lenders in attendance.

McCargo was sworn in as Ginnie Mae’s 18th President in December 2021 and now leads an agency that has been tasked with providing liquidity for government-insured loans, like the FHA’s Home Equity Conversion Mortgage (HECM).

She was simply affirming her agency’s mission, but because there are so many new reverse mortgage lenders moving into the industry right now, we caught a few confused looks during her presentation.

An influx of new professionals

We’ve written in this space before about the new lenders currently moving into the reverse space. These are largely forward mortgage lenders who have experience in housing finance, but who have not in the past explored offering reverse mortgages to their customers.

But now, with more seniors approaching the threshold age for a reverse mortgage, and interest rates and costs both rising, this loan program is starting to make a lot more sense.

Add to that the fact that the next generation Mortgage Cadence MCP can originate reverse mortgages as easily as it can forward loans (on the same tech stack!) and many of these lenders are already equipped with MCP, it makes perfect sense for them to be interested in the space.

Even lenders who are not currently using MCP are initiating conversations with Mortgage Cadence about our platform, in part because they want to originate more loan products without investing in a new tech stack. It makes good sense.

McCargo’s statements also made good sense. Here’s why:

Adding a sense of stability in a changing market

Mortgage Cadence had three executives in the audience when President McCargo made her statements. There was no new or additional commitment on the part of Ginnie Mae, but that wasn’t the point.

As mortgage lenders seek out new avenues to generate revenue and investigate reverse mortgage lending, something the government is keen to make available to senior homeowners, it’s important that they know there will be enough liquidity in the market to support their efforts.

They also needed to know that there would be a willing investor standing by to purchase their mortgage servicing rights, should they choose to sell them off at the time of loan origination.

That’s what McCargo provided with her statements, a sense of security that made it easier for attendees at the fall conference to explore this loan program.

And that’s exactly what happened. We’ve had an influx of interest in the Mortgage Cadence platform from lenders eager to get into the reverse mortgage space, not as a separate business, but rather as a new product offering they could add in addition to their traditional forward mortgages.

Also, nice to hear in her statements was the fact that Ginnie Mae was eager to expand its operations. The agency’s recent staffing challenges have slowed its efforts to support the industry and some worried that the agency could not keep up with the potential of increasing demand for the reverse product. Her comments added a layer of stability to the reverse mortgage market and will likely lead to more lenders moving into the space in the near future, which is a good thing.

By George Morales, Reverse Mortgage Product Manager at Mortgage Cadence 

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Mortgage Cadence: 
Alison Flaig 
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(919) 906-9738