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The general fund is to provide all kinds of subsidy program, that is using
government fund to help disadvantaged borrowers, so that is basically a
social welfare program, and it tries to cross-subsidize over time and over
locations. The objective there is to measure how much the government
has cut or spent to support this particular segment of the market. So
before 2009, the government actually computed how much money was
paid into the reverse mortgage market to help the senior citizens.
The new fund, MMIF, is actually an independent fund. The objective
is to be financially self-sustained, even in the worst stress economic
conditions. So the objective of that fund becomes to be financially
sound; you cannot lose money and cost the taxpayer. So when they made
this particular shift, there were a lot of the change in the program that
Okay, we already saw this graph of the HECM origination. The HECM became important. And this caused the data volume to peak at 2009
was initially introduced in 1989 as a pilot program, so it remained very before starting to decline. Session III
small. After about 10 years, it becomes a formal program and that's the time
when HECM becomes publicly known and people started using it. So we Now the question we should ask is whether the reverse mortgage
see that period of a rapid growing period is basically from the early 2000 up should be a social welfare program to support the senior citizens or
to the financial crisis. And by 2009, basically it's at the top of the origination it should be a fair market price, as a private transaction contract. So
volume, and a big decision had to be made of shifting the HECM program that's one question that all governments need to think first when they
from the general insurance fund to mutual mortgage insurance fund, or implement reverse mortgage.
MMIF. For most people, this shift probably doesn't make any difference, but
from the government's perspective, HUD, they have two funds;
378 2019 6th AFIS & ASMMA Annual Meeting 379
