Reverse Mortgages To Back Bond Issue

Reverse Mortgages To Back Bond Issue,

Ginnie Mae Plan Is Designed to Raise Market’s Liquidity

Federal housing-finance agency Ginnie Mae plans to roll out as soon as today what it calls the first “standardized” bond issue backed by reverse mortgages, a move aimed at boosting liquidity for one of the fastest-growing markets targeting baby boomers.

The offering, expected to total about $120 million, consists of more than 1,000 government-insured reverse mortgages, which allow homeowners 62 years old or older to turn home equity into income they don’t have to repay until they sell their homes.

Such loans have grown rapidly in popularity in recent years, thanks to the nation’s aging population, a lack of retirement savings and the rapid house-price gains in the first half of this decade. At the same time, a lack of a liquid secondary market for reverse mortgages — where lenders can sell, as opposed to hold, the loans they make, just as what they do with traditional mortgages — has constrained this growth.

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Full post here Reverse Mortgage Loan Blog

Written by News & Feeds on November 26th, 2007 with comments disabled.
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