"Late last month, the Mortgage Bankers Association (MBA) offered seven recommendations to reform the programs. Its letter focused on better liquidity options through Ginnie Mae to support the resecuritization of high-balance loans, along with a scaling back of the upfront mortgage insurance program that's been criticized for suppressing borrower demand. The MBA also spoke out in favor of alternatives to the second appraisal requirement for some HECM loans. It seeks increased use of automated valuation models (AVMs)"
"Meanwhile, the Appraisal Institute told government officials that it supports the second appraisal rule because it provides an essential check against overvaluation risk. In an interview with HousingWire's Reverse Mortgage Daily, NRMLA President Steve Irwin said his organization firmly believes that the FHA-insured HECM program is a critical foundation from which new products can be developed, and other cool and exciting innovation can happen."
The Mortgage Bankers Association proposed seven reforms emphasizing better liquidity through Ginnie Mae to resecuritize high-balance loans, scaling back the 2% upfront mortgage insurance premium to boost borrower demand, and promoting alternatives to the second-appraisal requirement including greater use of automated valuation models to reduce costs and processing times. The Appraisal Institute supports the second appraisal as an essential check against overvaluation risk. The FHA-insured HECM program is described as a critical foundation for developing new products and innovation. Proprietary reverse mortgages are available unevenly across states, with some states prohibiting them, and the upfront MIP particularly penalizes smaller equity withdrawals, affecting about 25% of potential borrowers.
Read at www.housingwire.com
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