The Two Side of Reverse Mortgages Position in MMI Fund
The ongoing back and forth on reverse mortgages' position in the MMI Fund continues. This time, the Government Accountability Office is getting involved simply to provide a look at the benefits and drawbacks.
GAO has built arguments on both ends including reasoning for the reverse ,mortgage program to stay in the MMI Fund.
"For instance, critics of including the loans in the overall fund have pointed out that HECMs tend to be more sensitive to changes in interest rates and overall economic trends, thus skewing the overall performance of the larger, more stable forward portfolio," according to Reverse Mortgage Daily.
On the other hand, GAO can also see how this would complicate things in the MMI Fund.
"But that variability could also make it hard to enforce a capital ratio; under current rules, the combined forward and HECM program must maintain a capital ratio of 2%," according to the report.
The report continues to go in-depth about major factors such as the possibility of creating pressure to increase insurance premiums. To take a look at the full pros and cons rundown, click on the image above.