A Primer on HECM Loans

In September, RiskSpan announced the addition of Ginnie Mae’s loan-level Home Equity Conversion Mortgage (“HECM”) dataset to the Edge platform. The dataset contains over 330,000 HECM loans with origination dates from 2000 to 2018 and reporting periods from August 2013 to October 2018.   This post is a primer on HECM loans, the HMBS securities they collateralize, and the structure of the new dataset.  What is a HECM?  HECMs are FHA-insured reverse mortgages that provide people 62 and older with cash payments or a line of credit…

RiskSpan VQI: Current Underwriting Standards – August 2018

RiskSpan’s Vintage Quality Index (VQI) held mostly steady in August, nudging up to 99.43 compared to 99.02 in July. The slight increase (indicative of generally looser underwriting standards) reflects modest increases in the proportion of high-LTV (over 80%) loans and mortgages with second liens behind them. These increases were offset for the most part by…

RiskSpan VQI: Current Underwriting Standards – July 2018

RiskSpan’s Vintage Quality Index (VQI) fell below 100 for the first time in 2018, settling at 99.02 and continuing a trend of mild tightening in underwriting standards. The decline was driven in part by a slight decrease in the proportion of high-LTV loans, cash-out refis, and single-borrower loans. The remaining risk layers held fairly constant. RiskSpan…

RiskSpan VQI: Current Underwriting Standards – June 2018

RiskSpan’s Vintage Quality Index (VQI) fell slightly, from 102.59 in May to 100.76 in June 2018, indicating a mild tightening but no major changes in underwriting standards. A slight increase in the proportion of loans made to borrowers with LTVs greater than 80% was offset by a reduction cash–out refis.  RiskSpan introduced the VQI in 2015 as a way of quantifying the underwriting environment of a particular…