Reverse Mortgage Separation now Backed by Former FHA Head
There is more support for reverse mortgages to be separated from the Federal Housing Administration's other loan pools. Carol Galante, a former FHA head believes that the program should be separated from the FHA.
"Speaking at an Urban Institute event in Washington, D.C. last week, Galante — FHA commissioner in the Obama administration from 2011 to 2014 — recommended splitting the administration’s capital reserves into two separate units for the forward and reverse programs," according to Reverse Mortgage Daily.
"Galante also recommended removing the Home Equity Conversion Mortgage program from the capital reserve calculation entirely, according to presentation slides associated with Galante’s remarks."
Galante's argument for the split is that it would enable the FHA to concentrate more on the core mission of the administration. While reverse mortgages focus on helping seniors, the FHA was focused on lower-income and first-time homebuyers.
With the possible separation, there would be more resources going to making the core mission of the administration possible. To learn more about the proposed separation of reverse mortgages from FHA, click on the image above.
