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 New View Advisors added to the discussion last week with a host of comments submitted to the U.S. Department of Housing and Urban Development (HUD) and the Federal Housing Administration (FHA).
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 request for information (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 Ginnie Mae) 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 National Reverse Mortgage Lenders Association (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 capit