On October 2, HUD published a request for information (RFI) in the Federal Register seeking public comment on the current state of the Home Equity Conversion Mortgage (HECM) and HECM mortgage-backed securities (HMBS) programs. The department sought input on the programs’ role in facilitating access to home equity for senior homeowners and on ways to enhance program performance, market participation, and consumer protections.

The RFI posed 21 questions, divided into five categories:

1. “Program Performance, Market Role, and Emerging Risks”: Questions under this category queried how well the HECM and HMBS programs have met their policy goals, the role HECMs should play for seniors given the rise of proprietary products, the impact on private-sector innovation, and whether any program features present new risks or costs to federal insurance funds or Ginnie Mae.
2. “Consumer Interest and Demand”: This category of questions focused on the reasons for declining consumer demand for HECMs, borrower understanding of product terms and risks, and how HECMs compare to other home equity or reverse mortgage products in terms of usability and borrower outcomes.
3. “Origination Volumes”: As to origination volumes, HUD sought input on barriers to lender participation in the reverse mortgage market, and whether changes to HECM features or products could encourage more lenders to enter the market.
4. “Liquidity”: Questions related to liquidity dealt with whether there had been unmet investor demand for HMBS, how product features could be changed to improve issuer operations and liquidity, and what risks or benefits might be associated with such changes.
5. “Program Improvements”: Finally, HUD’s questions in this section focused on possible regulatory or statutory changes, including updates to servicing and refinance policies, underwriting standards, and claim payment processes. The agency also sought input on issues such as the adequacy of the “Life Expectancy Set Aside,” HECM lender insurance, deferred maintenance monitoring, and ways to improve program efficacy while managing risk for FHA and Ginnie Mae.

Comments will be due on December 1.