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42 REVERSE MORTGAGE COMPLAINTS COMMON FOR OLDER AMERICANS Consumers aged 62 and older face a unique set of financial difficulties, according to the Monthly Complaint Report released by the Consumer Financial Protection Bureau (CFPB) in May. One of their prime concerns? Servicing issues with reverse mortgages. According to the report, "servicing problems with reverse mortgages" came in as one of the most complained about issues from consumers at least 62. Often, these problems even lead to erroneous foreclosure. "Older consumers with reverse mortgages seeking to stay in their house following the death of the borrowing spouse report servicing problems that sometimes result in foreclosure proceedings," the CFPB reported. Complaints surrounding reverse mortgages have long been common. e CFPB even produced a report on the matter in 2015. e report showed that 1,200 reverse mortgage complaints were filed between December 2011 and December 2014. e most cited concerns were "difficulty with changing the loan terms" and "problems communicating with loan servicers." Overall, complaints related to mortgages in general comprise 26 percent of all CFPB complaints submitted by consumers 62-plus; that's 10 percent higher than the number of mortgage-related complaints from consumers under 62. In addition to mortgage complaints, older consumers also often report difficulties recovering funds after being financially scammed, fees charged for unauthorized add-on products and services, and confusion surrounding deferred interest and zero-interest credit cards. "With more than 10,000 Americans turning 62 every day, older consumers are one of the fastest-growing consumer groups in the marketplace," the CFPB reported. "While older consumers are living longer and healthier lives than ever before, a growing number of older consumers face financial exploitation, struggles with debt, and entering retirement with limited savings." According to CFPB Director Richard Cordray, aging consumers are at a higher risk for financial issues than their younger counterparts. "Older consumers who may be on a fixed income are at a greater risk for financial trouble if they encounter problems with financial products or services," Cordray said. "e complaints submitted by older consumers are important for the bureau to ensure we are properly looking out for this segment of the population." CFPB complaints from older consumers were most common in California, Florida, and Texas. e three states accounted for almost 25 percent of all complaints since 2011. FANNIE MAE GETS GREEN LIGHT ON THIRD FRONT-END CIRT Fannie Mae announced that it secured commitments for a front-end Credit Insurance Risk Transfer (CIRT) transaction. e risk transfer will have been committed prior to Fannie Mae's acquisition of the covered loans, so the insurance coverage will be effective as soon as loans are acquired. is process is known as a "flow" basis. is will begin in the 2017 second quarter deliveries and is expected to be filled over the course of nine months. Fannie Mae's transaction will shift a portion of the credit risk on pools of single-family loans with a combined unpaid principal balance of about $5.2 billion to a group of reinsurers that are affiliates of mortgage insurers approved to write primary coverage on loans sold to Fannie Mae. e covered loan pool will consist of 30-year fixed-rate loans with loan-to-value (LTV) ratios greater than 80 percent and less than or equal to 97 percent. Primary mortgage insurance coverage will be applied to all loans covered by this new transaction and any credit losses not covered by the underlying primary mortgage insurance will be protected by CIRT. "Our three front-end CIRT transactions complement the coverage we acquire on a 'bulk' basis through Connecticut Avenue Securities (CAS) and our traditional CIRT, with coverage written by both diversified traditional reinsurers, as well as mono-line affiliates of our approved mortgage insurers," said Rob Schaefer, VP for Fannie Mae's Credit Enhancement Strategy & Management. "Our CIRT and CAS transactions cover loans with LTV ratios both above and below 80 percent. We are pleased with the robust interest this program is attracting. We remain committed to the transparency of these transactions, which support our goal to transfer credit risk away from taxpayers, while providing us certainty of coverage." e risk on the first 50 basis points of loss on an approximately $5.2 billion pool of loans will be retained by Fannie Mae. e participating mortgage insurance companies will cover the next 265 basis points of loss on the pool, up to a maximum coverage of approximately $138 million, if this approximately $26 million retention layer is exhausted. The drop in homeownership rates among 25- to 44-year olds in the last decade. Source: Fannie Mae's Perspectives 2017 blog STAT INSIGHT 10%

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