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Urban Institute Researchers Provide Insight On Improving The HECM Program

Urban Institute Researchers have taken to the drawing board to develop a new way of improving the HECM program, through reducing costs by addressing losses on assigned loans, according to a recent report from Reverse Mortgage Daily.

"By expanding the levels of participation, FHA would be better equipped to course-correct the financial status of the HECM program since much of the corrective action taken by the agency in 2017-18 actually served to limit participation instead of expanding it, the researchers write," according to RMD.

"By addressing the fact that assigned loans lead to losses for FHA, the program’s scope can be improved while having a positive impact on the HECM program’s place in the MMI fund, the researchers say."

Meanwhile, the report also suggests that developing a "program of securitization" to repool loans after they reach 98 percent of the maximum claim amount. This would also mean that they are no longer in Ginnie Mae HMBS'.

"This is critical to the future viability of this valuable program for seniors," according to the UIR.

To learn more about the study and suggestions from the UIR, click on the image above.

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