"New View pointed out that the FHA continues to record negative Claim Type II losses on HECMs, meaning that the agency ended up with a net gain in this area. As was the case last year, FHA's HECM Claim Type II loss is negative; in other words, FHA is making a profit on its HECM claims. Is this an insurance fund or a hedge fund? New View asked."
"The losses that do exist are small, the commentary points out. Claim Type I and supplemental claim losses totaled about $241 million in fiscal year 2025, down from more than $300 million a year earlier. Losses represented about 0.38% of the $64 billion in HECM insurance-in-force, less than the program's 0.5% annual mortgage insurance premium. The report shows no material losses on HECMs originated after fiscal year 2017, according to the commentary."
Expanded HECM disclosures show MMIF solvency and financial strength. The FHA records negative Claim Type II losses on HECMs, producing net gains on HECM claims. Claim Type I and supplemental losses totaled about $241 million in fiscal 2025, down from over $300 million, about 0.38% of $64 billion in insurance-in-force, below the 0.5% annual premium. No material losses appear for HECMs originated after FY2017. The FHA Secretary's Notes portfolio of assigned HECM loans is estimated at $49 billion. Structural issues continue to suppress demand, with limited interest in term and tenure products and fixed-rate HECMs holding 0.14% market share in fiscal 2025.
Read at www.housingwire.com
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