The article discusses the ramifications of RMF's bankruptcy on securitization process, specifically how the absence of a notice for optional redemption has prompted scrutiny. KBRA highlights potential scenarios for impacts on the payment waterfall based on decisions made by controlling noteholders. Following RMF's bankruptcy, Longbridge Financial acquired mortgage servicing rights, now managed by Celink, amidst a crisis in the reverse mortgage secondary market. Ginnie Mae's unique step to extinguish RMF from the HMBS program drew an OIG inquiry. Future implementation of a new HMBS program may face political obstacles due to recent transitions in administration.
The terms of the indenture require notice by December 24, 2024, for optional redemption or an asset auction, but no such notice was provided post-RMF bankruptcy.
Ginnie Mae's unprecedented move to extinguish RMF from the HMBS program led to an OIG inquiry, highlighting challenges in reverse mortgage securitization.
Longbridge Financial acquired many of the mortgage servicing rights after RMF's bankruptcy, with servicing now managed by Celink, amid a liquidity crisis.
The transition to President Trump's second administration may pose challenges to the new complementary HMBS program aimed at alleviating industry liquidity issues.
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