Ideas for reshaping the federally insured reverse mortgage program and its avenue for secondary market issuance is the hot topic of conversation for industry professionals in late 2025. And Новые советники по просмотру added to the discussion last week with a host of comments submitted to the Министерство жилищного строительства и городского развития США (HUD) и Федеральное жилищное управление (ФГА).
The company published a lengthy blog post on Dec. 3, noting that it’s been offering its thoughts on potential improvements and innovations for the Home Equity Conversion Mortgage (HECM) and HECM-Mortgage Backed Securities (HMBS) programs since 2009.
The comments came in response to HUD’s October запрос информации (RFI) on the programs. While some feedback has already been delivered, the department earlier this week extended the deadline for submissions to Jan. 5, 2026.
The discussion also coincides with a rise in private-label reverse mortgages, which according to New View’s estimates, now account for about 40% of market activity.
New View addressed each of the 21 questions posed in the RFI. It believes that some of its suggested reforms could be enacted right away, while others might take a year or longer.
“For the HECM/HMBS program to remain relevant, HUD (including FHA and Джинни Мэй) must enact a series of new reforms, or else its federally guaranteed reverse mortgage program will remain a curious appendage to the mortgage industry,” the post read.
‘Excessive’ mortgage insurance premiums
Similar to recent comments made by the Национальная ассоциация кредиторов обратной ипотеки (NRMLA), New View Advisors referenced the HECM program’s upfront mortgage insurance premium (MIP) as an area ripe for change.
New View opined that the upfront MIP — equal to 2% of the home’s value or the current loan limit, whichever is less — is “excessive” and makes HECMs an “expensive product.”
It noted that a borrower whose home value exceeds the 2026 loan limit of $1,249,125 would pay nearly $25,000 in upfront MIP, while a borrower who owns a $500,000 house would pay $10,000.
“For many borrowers, this is a material obstacle to overcome, and no doubt contributes to the low volume of HECM origination, as well as its nagging high-cost reputation.”
New View’s argument for a lower upfront premium is also tied to the health of the FHA’s Mutual Mortgage Insurance (MMI) Fund. The fund is statutorily required to maintain capital reserves of 2%, but a отчет issued late last year showed the ratio topped 11%.
New View added that the HECM financial assessment reduces risk to the FHA and makes a higher upfront MIP unnecessary. It pointed to FHA’s data showing that annual MIP fees of 0.5% sufficiently cover losses tied to the HECM program. And it called for HUD to cut the initial charge in half, to 1% of the home value or less, while basing the fee on the initial principal limit that’s set at closing, rather than the maximum claim amount.
Line of credit too risky?
In response to HUD’s question about “emerging risks or costs” to the MMI Fund or Ginnie Mae, New View Advisors said that the line of credit (LOC) option — which represents the vast majority of HECM originations — includes a “highly unsound lending practice.”
The company wrote that the LOC is allowed to grow at the rate of interest, plus the monthly MIP rate, which permits “unmanaged, automatic growth to the amount a homeowner can borrow without refinancing or reappraisal.”
It criticized the feature as running counter to home equity lines of credit (HELOC), which do not offer automatic growth and can, in fact, be frozen to mitigate lender risk in instances such as declining home values.
New View proposed that the LOC growth feature be eliminated and that these loans be limited to terms of five to 10 years. It suggested an end to HECM term, tenure and modified options. And it called for lowering the initial principal limit in exchange for a proportionately lower upfront MIP and a closed-end feature.
No more counseling
Every HECM borrower must receive консультирование from a HUD-approved provider. But New View believes that if the “dizzying array of product choices” were simplified, as it suggests, this requirement could be lifted.
The company said that the many options available “succeed only in confusing the borrower,” which has harmed the product’s reputation and suppressed sales volumes for years. It also suggested that counseling “gives HECM a negative connotation” while noting that more complex financial products such as annuities, insurance and adjustable-rate forward mortgages don’t have a counseling requirement.
“Over the decades, we believe counseling has been watered down substantially, making it more of a check-the-box step rather than a more serious safeguard,” the company wrote.
“During a panel at NRMLA’s annual conference in October, a speaker spoke of the challenges his grandfather faced trying to learn and understand HECM. It is not an easy product to explain, and adding additional bells and whistles, even if they’re in the best interest of the borrower, rather than provide clarity, often are the source of much confusion.”
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