Late
last
week,
Indiana
Sen.
Mike
Braun
(R)

submitted
a
letter
to


Ginnie
Mae
president
Alanna
McCargo
asking
about
what
he
identified
as
recent
bouts
of
instability
in
both
the
Home
Equity
Conversion
Mortgage
(HECM)
and
HECM-backed
Securities
(HMBS)
programs,
which
stemmed
from
the
collapse
of
a
major
lender
and
challenges
that
Ginnie
Mae
has
described
in
maintaining
a
large
portfolio
of
reverse
mortgages.

To
get
a
better
idea
of
what
prompted
the
letter
and
his
interest
in
the
reverse
mortgage
program,
RMD
reached
out
to
Braun’s
office
with
a
series
of
questions
about
his
perspectives.

‘Red
flags’
and
OIG
inquiry

When
asked
about
what
first
caused
the
senator
to
pay
more
attention
to
HECM
and
HMBS
program
issues,
he
explained
that
the

late
2022
failure
of

Reverse
Mortgage
Funding
(RMF)
and
the
subsequent

assumption
of
is
reverse
mortgage
portfolio
by
Ginnie
Mae
were
major
influences
toward
his
decision
to
inquire
about
the
program’s
challenges.

“RMF’s
failure
raised
serious
red
flags,”
Sen.
Braun
said
in
an
email
to
RMD.
“The
scope
of
this
failure
is
glaring,
comprising
36
percent
of
all
existing
HECM
loans
at
the
time.
I
am
seeking
clarity
about
Ginnie
Mae’s
actions
in
dealing
with
this
distressed
issuer
and
their
actions
to
fix
underlying
programmatic
problems.”

In
late
2023,
the

U.S.
Department
of
Housing
and
Urban
Development
(HUD)
Office
of
the
Inspector
General
(OIG)
announced
that
it
was

initiating
an
inquiry
into
how
Ginnie
Mae
monitored
RMF,
as
well
as
Ginnie
Mae’s
extinguishment
of
the
failed
lender
from
its
HMBS
program.
OIG
Rae
Oliver
Davis
said
at
the
time
that
the
inquiry
was
being
initiated
“because
extinguishing
issuers
and
seizing
their
portfolios
places
significant
stress
on
Ginnie
Mae’s
operations.”

When
asked
why
he
was
not
willing
to
wait
for
the
OIG
to
finish
its
own
inquiry
before
making
his
own
overtures,
Braun
said
that
he
feels
like
waiting
may
not
be
an
option.

“The
timing
is
important
as
Ginnie
Mae

explores
improvements
to
the
HMBS
program,”
he
said.
“The
Senate
Aging
Committee
strives
to
protect
seniors
and
prioritizes
oversight
of
aging-related
issues,
like
reverse
mortgages,
and
my
letter
highlights
information
that
is
vital
to
the
longevity
and
stability
of
the
program.”

Additional
scrutiny,
bipartisan
potential

In
his
letter,
Braun
alluded
to
the
potential
for
additional
“congressional
scrutiny”
related
to
the
oversight
of
the
federally
backed
reverse
mortgage
program.
When
asked
to
expand
on
that
thought,
Braun
explained
that
additional
transparency
into
an
important
event
like
the
RMF
collapse
is
necessary.

“There
needs
to
be
more
information
on
their
dealings
with
RMF
as
it
fell
into
distress,”
Braun
said.
“It’s
also
important
to
know
about
the
RMF
assets
that
Ginnie
Mae
is
now
servicing,
since
they
have
never
extinguished
an
HMBS
portfolio
previously.
We
need
to
have
congressional
oversight
over
their
efforts
to
improve
troubled
issuers’
management
practices
and
their
proposals
to
improve
liquidity
in
the
HMBS
program.”

With
both
the


House
of
Representatives
and
the


Senate
having
such
narrow
divides
along
party
lines,
the
potential
for
added
partisanship
—
especially
headed
into
a
hotly
contested
presidential
election
—
remains
high.
RMD
asked
Braun
if
he
feels
this
issue
could
descend
into
the
same
kind
of
pattern,
but
he
seemed
to
be
open
to
the
idea
of
both
parties
coming
together
to
address
HECM
and
HMBS
program
challenges.

“It’s
a
nonpartisan
issue,”
he
said.
“While
I
sent
the
letter
alone,
there
is
a
great
opportunity
to
work
with
the
other
side
of
the
aisle
if
further
action
occurs.”

He
added
that
it’s
important
for
the
industry
itself
to
be
present
during
such
discussions.

“Transparency
is
vital
to
the
function
of
the
HECM/HMBS
program,
and
it’s
important
for
Ginnie
Mae
to
make
sure
Congress
and
industry
professionals
are
at
the
table
when
it’s
time
to
make
decisions,”
Braun
stated.

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