During the National Reverse Mortgage Lenders Association’s annual trade show earlier this week in New Orleans, attendees learned just how important the new HECM Saver is to the future of the industry.

“If we had not been able to get the HECM saver to market, we would’ve been in a really difficult situation,” said David Stevens, Commissioner of the Federal Housing Administration during a speech in front of over 550 reverse mortgage professionals.

Facing a $250 million shortfall in the HECM program earlier this year, the administration was forced to act in order to ensure the program could continue to meet the needs of seniors looking to withdraw equity from their home.

“I think the revers mortgage program is critically important,” said Stevens, but admitted he was worried they might lose the program due to negative economic assumptions and some in Washington who felt FHA didn’t take care of some of the risk factors.

To offset the shortfall, the administration developed the HECM Saver to provide additional cash-flow to offset any losses from the HECM Standard and not be forced to significantly lower principal limits for the second year straight.

Stevens encouraged attendees to embrace the new low cost product to ensure that FHA can keep the HECM Standard alive and thriving.

“Inability to implement the HECM Saver, is going to put additional pressure on the HECM standard,” he said.  “We’ve got a graying population, they will be knocking on the door if this is done the right way.”