President Ginnie Mae talks about reverse mortgage environment, federal challenges with RMD monopoly



2023 has been a very busy year for President Alana McCargo. Government National Mortgage Association (Ginnie Mae).

McCargo, who was sworn into office in early 2022, becomes Ginnie Mae’s first full-time president since the Barack Obama administration, when Ted Tozer resigned just before former President Donald Trump took office.

In addition to managing the government’s mortgage-backed securities program, Ginnie Mae is currently increasing its investments in the Home Equity Conversion Mortgage (HECM)-backed securities (HMBS) program, which is the equivalent of a reverse mortgage. This change reverse mortgage financing (RMF) and Ginnie Mae took over its service portfolio even though they knew they needed more resources to properly manage it.

RMD spoke with McCargo during the meeting to get a sense of what’s going on from her leadership perspective. National Reverse Mortgage Lenders Association (NRMLA) October Annual Meeting and Exhibition.

Editor’s note: This Q&A has been edited and condensed for clarity.

Chris Clow/RMD: Is this your first time at a reverse mortgage conference?

Alana McCargo: No, but this is my first meeting with the NRMLA as Ginnie Mae president.

Crow: When you attend these conferences, what are you trying to learn from the industry experts you interact with?

McCargo: The important thing is [that] Listening and listening to feedback from the industry makes us better at what we do. It’s invaluable to be in that room and hear first-hand about the changes we’ve made, the things we’ve done, the things they’d like to see that we haven’t done yet. This is a great opportunity to listen, and we’ve been listening a lot lately.

That’s really important and my style is to listen and collaborate. That’s how I grew up in this industry and I’ve always done it in different ways throughout my career, so that’s very beneficial in the work that we do now.

Crowe: Did you learn anything from these sessions that you think is practical?

McCargo: Oh, yeah. [Certainly] I have been listening ever since I acquired the RMF portfolio late last year. We’ve done a tremendous amount of in-depth work with the industry, first of all, to think about and fully understand the stresses that currently exist within the system and the pain points that publishers are feeling. . Our job is liquidity, and given the high interest rates and liquidity crunch the industry is currently facing, it’s to keep things stable and ensure we can weather tough market cycles.

Alana McCargo, President of the Government National Mortgage Association (Ginnie Mae);Alana McCargo, President of the Government National Mortgage Association (Ginnie Mae);
Alana McCargo

This listening ability itself has allowed us to quickly do some things to stabilize liquidity. The latest thing it announced, effective October 1st, was a change in pool size to help some smaller issuers, and a brand new multitail securitization operation. Since I just started it, I completed it quickly.

Already, we’re hearing that change is happening. This is a bit of a surgical thing, and we’re just listening to feedback and then really working on what we can do, including being able to act quickly without needing Congress, without needing legislation. Like FHA, we take them seriously. [HUD Commissioner Julia Gordon] We’re all listening, so we talked about what they’ve been focusing on right now. FHA also plays a role in liquidity.

They’re really helpful with quick claims processing and everything that’s going on. We couldn’t have gotten to this point so quickly without industry input. That’s why the NRMLA conference is so helpful. .

Crowe: It’s no secret that the HMBS program is currently facing serious challenges, driven in no small part by the failures of major issuers. What do you think people in the industry should know about challenges that may not be so obvious?

Mr. McCargo: Ginnie Mae has had guarantees for some time, but this is the first time Ginnie Mae has had to underwrite a reverse mortgage portfolio. This is completely new for the entire agency and comes with a lot of responsibility. The reverse mortgage business has been a learning experience for us because it’s unique in how we operate our business model, how we handle the transition of our borrowers, and how we respond to the draws that our borrowers request each month.

Our ability to act as a reverse servicer and actually provide warranty the way we’ve been doing it and do it without any issues is pretty amazing to watch this team do. So I think it was a great learning experience for us. I learned how to do it more functionally.

[We’ve been] A budget that allows you to manage a $20 billion portfolio with the same amount or resources, redirect what you’ve been working on, manage it, and hire more people to take on the responsibilities you currently have. I’m trying to increase the.

I think that’s what people don’t realize. We were taking over and assuming significant responsibilities as a servicer while still trying to address the liquidity needs of the rest of the industry. All I can say is that this was probably the most “in-your-face” thing we’ve ever experienced. This was a big deal for us, and a big challenge in itself with its own set of challenges we didn’t expect. But I think the team approached it positively.

McCargo: I hope so. When I joined Ginnie Mae almost two years ago, I knew I was joining an agency that had been severely underfunded for many years, so my first priority was to focus on myself.

We’ve been on a journey to right-size Ginnie Mae since I joined the company. We then acquired this portfolio and the role we currently play in the reverse industry. [that has] It’s just accelerated the need for more focus, more resources, more people to do the business that we need to do.

So this is important. The 2024 budget does see an increase, and both the House and Senate supported it in increasing the full-year budget. unfortunately, [continuing resolution] The situation that we’re operating in right now is actually reducing our ability to do the hiring and planning that we want and need to do because we’re plateauing.

Therefore, it is necessary to resolve the situation in the House of Commons. Obviously we need a budget and we hope to get the full budget we requested in 2024. Therefore, we have expectations and play an important role in financial markets. Regardless of whether there is a government shutdown or not, we will continue to operate our core businesses, which are essential functions of the nation. But the things we’re talking about that need to be done in the reverse mortgage industry, for example, go beyond the core business.

Therefore, this is a programmatic and policy initiative that requires human resources and human resources to execute. That’s paramount to us, and that’s why it’s so important that we pass the full budget we request, which means we can continue to create the jobs we need for the future.

Editor’s note:This interview was conducted before the current Speaker of the House took office.

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