“The
terms
of
the
indenture
stipulate
that
the
issuer
provide
a
notice
of
its
intent
to
either
exercise
an
optional
redemption
or
conduct
an
asset
auction
by
December
24,
2024,”
KBRA
said
in
its
comment
on
the
securitization.
“Given
RMF’s
bankruptcy,
no
such
notice
was
provided.
In
the
comment,
KBRA
discusses
a
number
of
possible
scenarios
and
their
potential
impact
on
the
payment
waterfall,
depending
on
whether,
and
how,
controlling
noteholders
direct
the
indenture
trustee.”

Many
of
the
mortgage
servicing
rights
(MSRs)
to
the
loans
inside
the
securitization

were
acquired
by


Longbridge
Financial
following
RMF’s
bankruptcy,
the
notice
said,
and
day-to-day
servicing
responsibilities
are
being
handled
by


Celink.
KBRA
added
that
it
will
“continue
to
monitor”
the
securitization
under
its
stated
reverse
mortgage
securitization
methodology.

While
the
loans
in
this
securitization
are
proprietary,
RMF’s
status
as
a
Home
Equity
Conversion
Mortgage
(HECM)-backed
Securities
(HMBS)
issuer
was
extinguished
by


Ginnie
Mae
shortly
after
the
company
declared
bankruptcy.

That
marked
the
first
time
Ginnie
Mae
had
ever
exercised
its
authority
to
extinguish
an
issuer
from
the
HMBS
program.
The
move
later
caused
the


U.S.
Department
of
Housing
and
Urban
Development
(HUD)’s
Office
of
the
Inspector
General
(OIG)
to

open
an
inquiry
into
the
situation
that
led
to
the
decision.

A
liquidity
crisis
in
the
reverse
mortgage
secondary
market
followed,
causing
Ginnie
Mae
to

assume
control
of
the
RMF
portfolio
of
HECM
loans.
In
January
2024,
Ginnie
Mae

announced
it
would
develop
a
complementary
HMBS
program
to
address
industry
liquidity
issues,
culminating
in
the
November
2024
release
of
a
final
term
sheet
for
the
program
known
as

“HMBS
2.0”.

But
the
recent
political
transition
to
the
second
administration
of
President
Donald
Trump
could
create
roadblocks
to
implementing
the
program,
according
to

recent
executive
orders
issued
by
Trump
and

staffing
issues
at
Ginnie
Mae.