The U.S. Department of Housing and Urban Development (HUD) endorsed its first HECM loan in 1989 and has endorsed over 525,000 loans since, with about 400,000 of those endorsements occurring between 2004 and 2008. HECMs account for nearly 90% of the entire reverse-mortgage market, meaning that nearly all of the reverse-mortgage risk lies with the U.S. federal government. This raises the question, what happens to the HECM portfolio when the value of the average U.S. home falls 30%, 40%, or even 50% over a relatively short period of time?...