Ginnie Mae plans to staff up to handle RMF portfolio

Ginnie Mae is looking to significantly grow its team to help manage the "sizable and complex portfolio" of Reverse Mortgage Funding, which it seized in late-December. But to do so, the government guarantor needs more funding.

The agency is requesting a $61 million budget for salaries and expenses next year, an increase of $20.6 million from this year's levels, according to the Department of Housing and Urban Development's appropriation request for 2024.

Ginnie, a corporation within HUD, plans to use some of the funds to hire an additional 70 employees, beefing up the agency's headcount to 271. The appropriations would also be used to build out "policy enhancements for the reverse programs resulting from this default."

The bankruptcy of Reverse Mortgage Funding, which ranked as the largest issuer of securitized Home Equity Conversion Mortgages in 2021, was announced in late November. Ginnie Mae and Fannie Mae quickly confiscated its portfolio and promised borrowers that there would be "minimal direct impact." 

RMF's portfolio has been transitioned to an undisclosed master subservicer and "Ginnie Mae now assumes responsibilities for ongoing management and operation of the defaulted portfolio," HUD said in its budget request.

Industry stakeholders have pondered if Ginnie can logistically handle these types of events and whether they could hurt the agency's mission to inject liquidity into federal housing programs.

The government guarantor did not disclose what roles need to be filled to better manage RMF's portfolio, nor what policy enhancements it is looking to implement in the future. 

Currently, the agency is also looking to bring on board an executive vice president and chief operating officer, who will have roles in handling risk management, the agency announced in early March.

Overall, HUD is requesting a budget of $73.3 billion for 2024, an increase of $1.1 billion from the 2023 enacted funding level.

HUD wants $1.9 billion for salaries and expenses, $155.2 million above the enacted levels to continue bringing on board new employees. In combination with carryover funding from 2023, this increase would support 8,635 employees and "enable the department to better and more efficiently serve households and communities across the country."

From 2012 to 2019, HUD saw a 20% decline of its workforce. The loss of staff "presented serious risks to HUD's ability to meet the needs of its customers, protect against cybersecurity threats, and deliver on the mission," the department said. 

The department is also asking for $2.3 billion for management and administration expenses. Of that sum, $415 million would go to modernizing HUD's IT systems, which have been criticized for being outdated. 

Additionally, $100 million is requested for a FirstHOME down payment assistance initiative, which would provide funding to states and insular areas to support sustainable homeownership for first-generation homebuyers.