Senator Braun sends letter to Ginnie Mae on Reverse Mortgage Failure

WASHINGTON—U.S. Senator Mike Braun sent a letter to Alanna McCargo, the Acting President of the Government National Mortgage Association ("Ginnie Mae"), to highlight and address the challenges arising in HUD's Home Equity Conversion Mortgage Program, commonly known as the reverse mortgage program, due to the bankruptcy of a key company. The letter requests additional information about proposed policy solutions to safeguard the reverse mortgage market moving into the future. This letter builds on an investigation recently launched by the Housing and Urban Development’s Office of Inspector General.

Senator Braun wrote:

“As Ranking Member of the United States Senate Special Committee on Aging, I am writing to address the challenges facing the Housing and Urban Development’s (HUD) Home Equity Conversion Mortgage Program (“HECM”), also known as a reverse mortgage program. Reverse mortgages can be a lifeline for older homeowners needing access to cash during retirement, and recent failures threaten the financial security for hundreds of thousands of seniors. Mismanagement of this program could lead to the collapse of the reverse mortgage market that hurts both seniors and taxpayers. Specifically, I am concerned about the stability and viability of the program as new details emerge regarding the bankruptcy of a key company called “Reverse Mortgage Funding” (RMF). I also request more information about proposed policy solutions to safeguard the reverse mortgage market in the future,”

Senator Braun continued:

“In November 2019, the Government Accountability Office (GAO) released a report highlighting concerns with how Ginnie Mae manages risk. The report noted troubling factors including staffing problems and oversight shortcomings and provided recommendations to fix the very problems that may have contributed to bankruptcy of the company “Reverse Mortgage Funding” (RMF) in November 2022.”

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