The reverse mortgage industry has been anticipating the development of a new, complementary Home Equity Conversion Mortgage (HECM)-backed Securities (HMBS) program designed to further address liquidity issues in the aftermath of the collapse of a major lender and issuer.
But following the results of the 2024 presidential election, the implementation of “HMBS 2.0” and other potential priorities sought by current leaders could be in flux through no fault of Ginnie Mae, the government-owned company that oversees the forward and reverse mortgage-backed securities programs. There are also other in-development policies in other areas of the government to consider.
Ginnie Mae shakeup
Prominent resignations of leading officials, and statements from president-elect Donald Trump's congressional allies, could lead to slowed movement on some in-progress policy fronts. These may include housing broadly and HMBS 2.0 specifically.
One of the most obvious potential speed bumps to the implementation of the HMBS complement is the recently announced resignation of Sam Valverde, Ginnie Mae's current acting president. Valverde stepped into the leadership role in May following the resignation of Alanna McCargo.
Valverde has been a prominent point person as Ginnie Mae has been developing HMBS 2.0, announcing some of its key provisions and offering a potential timeline for the release of an updated term sheet. Steve Irwin, president of the National Reverse Mortgage Lenders Association (NRMLA), recently recognized Valverde for these efforts in a weekly email update to the association's membership.
“On behalf of NRMLA, I wish to extend our appreciation to Sam Valverde for his steadfast support and leadership in developing HMBS 2.0 these past several months,” Irwin wrote. “We wish him the best of luck with his future plans.”
While the term sheet could still be released sometime this month prior to his exit, Valverde's resignation goes into effect Nov. 30, leaving nearly two months before the presidential transition takes place on Jan. 20, 2025. And this timeline will be slightly truncated by the holiday season.
While a successor to Valverde has been named in the form of longtime Ginnie Mae senior vice president Gregory Keith, things could be complicated further by the position of certain congressional leaders in the run-up to the inauguration.
The presidential transition
Sen. Tim Scott (R-S.C.), an upper-chamber ally of Trump, recently submitted a letter to President Joe Biden urging that his administration cease policymaking and personnel nomination activities for the remainder of his term in office.
The letter was also sent to current cabinet secretaries and agency heads such as Adrianne Todman, acting secretary for the U.S. Department of Housing and Urban Development (HUD), and Sandra Thompson, director of the Federal Housing Finance Agency (FHFA).
“As the top Republican on the Senate Committee on Banking, Housing and Urban Affairs, I call on the agencies overseen by the committee to cease all rulemaking, including the finalization of any pending or proposed regulations or guidance, and to comply with federal record retention laws and preserve all agency documents,
