Just as the market for reverse mortgage loans was hitting a major slump due to lack of demand and a diminishing origination volume base, the Department of Housing and Urban Development has put in place significant changes to its Home Equity Conversion Mortgage (HECM) program which many market observers say may make reverse mortgages a more attractive and profitable asset class - and therefore a more popular asset to be securitized going forward.

Last week, HUD announced two major changes to its reverse mortgage program that may boost reverse mortgage securitizations over the next two years. Firstly, the Federal Housing Administration will begin insuring reverse mortgages in the state of Texas, the only state that did not allow reverse mortgage originations up until now. Secondly, HUD changed the permitted origination fee for new HUD-insured reverse mortgages - a change that will surely make the loan product more popular among its often cash-poor customers, senior citizens.

Subscribe Now

Access to a full range of industry content, analysis and expert commentary.

30-Day Free Trial

No credit card required. Access coverage of the securitization marketplace, including breaking news updated throughout the day.