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Worry Ensues Despite Reverse Mortgage Securities Market Success

March 7, 2018

The month of February was monumental for Home Equity Conversion Mortgage-backed securities, however, experts are suggesting caution due to the fear of an imminent drop.

 

"HMBS issuers logged 129 loan pools last month for the second-highest dollar value — $1.47 billion — ever recorded, falling short of December 2009’s record according to the most recent data from New View Advisors," according to Reverse Mortgage Daily.

 

“'However, the new principal limit factors are reducing origination volume,' New View wrote in its February 2018 report, echoing indications from around the industry that the lower PLFs rolled out last October are beginning to have an effect on overall volumes."

 

The lower principal limit factors have been a heavy topic of discussion. It has also faced criticism from a number of experts and associations due to the dangers it poses to consumers. 

 

Just today, we shared a post where the AARP weighed in on the dangers of the new reverse mortgage math structure. 

 

To learn more about the potential drop in HMBS, click on the image above.

 

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