HMBS November 2021: Issuers Give Thanks for Record-Smashing Month

December 1st, 2021

HMBS issuers rewrote the records books in November, posting yet another $1.2 billion month and setting new HMBS records for both total annual issuance and monthly original loan pools. Refinancing activity continued to be strong. 96 pools were issued in November, including 52 first-participation CMT pools. Before January 2021 no new first-participation CMT pools had been issued for many years.

With November’s activity, HMBS issuance now stands at $11.7 billion for 2021, an all-time record. The previous all-time HMBS annual volume year was 2010, with $10.8 billion issued.

November’s production of original new loan pools was a record $1.08 billion, edging out October’s previous record $1.07 billion. Approximately $765 million in original new loan pools were issued in November 2020.

November issuance divided into 63 first-participation or original pools, and 33 tail pools. Original pools are those HMBS pools backed by first participations in previously uncertificated HECM loans. Tail HMBS issuances are HMBS pools consisting of subsequent participations. Tails are not from new loans, but they do represent new amounts lent. Tail HMBS issuance is essential for HMBS issuers to finance their monthly advances, such as borrower draws and FHA mortgage insurance premiums. Last month’s tail pool issuances totaled $148 million, below the typical range.

New View Advisors compiled this data from publicly available Ginnie Mae data as well as private sources.

HECM Endorsement Analytics – October 2021

November 16th, 2021

October saw 5,029 HECM loans endorsed, the highest unit count since May 2020. As is the case with 2021 HMBS dollar volume, by mid-November, i.e. now, total endorsement count will exceed what was printed for all of calendar 2020. Our report can be found here: NV Endorsement 2021_10. Every top lender increased endorsements from the previous month; in particular, PHH more than doubled its endorsement count again reaching 615 loans, by far its highest monthly endorsement tally in history.

HUD’s September Endorsement Snapshot Report was released on its website today. There was no material change from last month. South River Mortgage posted another strong month in wholesale, with 108 endorsements. Over the last six months, SRM has overtaken Fairway Independent Mortgage to become the leader in this group.

New View Advisors continues to offer its Who Buys What From Whom (WBWFW) report as part of our endorsement report subscription. The report compiles publicly available Ginnie Mae data to show which HMBS issuers buy HECMs from which lenders.

The WBWFW report includes:

  • Top Originators – a ranking by original HECM UPB of all lenders over the last twelve months
  • WBWFW – an alphabetical cross-reference between every lender and the HMBS issuer that securitizes its loans
  • Top 100 Trends – a breakdown of loan sales by month, by Top-100 lender, by HMBS issuer.

Edited samples from this month’s WBWFW report are at the end of our endorsement writeup. These reports together provide accurate insight for sales and marketing teams to learn just who’s buying what from whom. The dataset is more complete and timely than what endorsement analysis alone can show.

New View Advisors and Recursion Reverse Mortgage Prepayment Indices – October 2021

November 9th, 2021

New View Advisors and Recursion October 2021 expanded HECM reverse mortgage prepayment indices can be found here: New View Advisors Recursion Cohort Speeds 10_2021. The indices are derived from underlying HECM data in HMBS made public by Ginnie Mae, as well as private sources. This new expanded set of prepayment data is calculated using dollar principal balance, not unit count.

The enhanced data set shows current trends in prepayment activity by product type and Principal Limit Factors (PLFs), and for current 12-month LIBOR PLFs by Expected Rate. HECM loans with higher Expected Rates originated in the year or so prior to the precipitous fall in interest rates brought on by the pandemic are experiencing higher prepayment rates. Therefore, we segregate indices for recent production 12-month LIBOR PLFs into Expected Rates greater than 4% and Expected Rates less than or equal to 4%.

Prepayment speeds are expressed as annualized percentages in three categories: Total Payoffs, Payoffs Other Than Assignments, and Payoffs from Assignment. For each category, we calculate the 1-month, 3-month, 6-month and 12-month CPR, or annual rate of prepayment.

For HMBS pools backed by adjustable rate HECMs using the Constant Maturity Treasury (CMT) index, prepayment speeds will continue to populate as more of these HMBS are issued.

HMBS October 2021 Part II: Record Issuance Drives HMBS Supply

November 9th, 2021

Outstanding HMBS rose to a record $56.8 billion in October 2021, as high levels of both issuance and HECM loan payoffs continued. HMBS payoffs exceeded $1 billion for the eighth month in a row. Outstanding HMBS rose by about $90 million. These big numbers, very similar to September’s totals, reflect continued high levels of refinancing. Low interest rates and high home values allow more senior homeowners to borrow larger HECM loans.

Despite sharply declining refinance volume in the forward mortgage market, HECMs refinancing remains strong. According to multiple sources, refinancing accounts for as much as one half of new originations.

In 2019, HMBS posted its lowest annual issuance total in five years. But in 2020, low interest rates, rising home prices, and a higher lending limit boosted production significantly, to a near-record $10.6 billion. In the first ten months of 2021, HMBS new issuance already exceeds $10.4 billion.
Our friends at Recursion broke down the prepayment numbers further: last month’s 98% MCA mandatory purchases totaled $238 million, less than 20% of the total.

New View Advisors compiled this data from publicly available Ginnie Mae data as well as private sources.

HMBS October 2021: Will Refis Come Back to Haunt HMBS?

November 1st, 2021

HMBS issuance remained strong in October. HMBS issuers posted another $1.2 billion in total issuance volume and set another new record for new loan pools, tempered by yet another month of strong refinance activity. 102 pools were issued in October, including 50 first-participation CMT pools. Before January 2021 no new first-participation CMT pools had been issued for many years.

The all-time HMBS annual volume year is 2010, with $10.8 billion issued. That was when Principal Limits were high and no borrower financial assessment safeguards had been established. That record will fall in November, as nearly $10.5 billion was issued in the first ten months.

October’s production of original new loan pools was a record $1.07 billion, edging September’s previous record of $1.03 billion. Approximately $674 million in original new loan pools were issued in October 2020.

September issuance divided into 62 first-participation or original pools, and 40 tail pools. Original pools are those HMBS pools backed by first participations in previously uncertificated HECM loans. Tail HMBS issuances are HMBS pools consisting of subsequent participations. Tails are not from new loans, but they do represent new amounts lent. Tail HMBS issuance is essential for HMBS issuers to finance their monthly advances, such as borrower draws and FHA mortgage insurance premiums. Last month’s tail pool issuances totaled $135 million, below the typical range.

New View Advisors compiled this data from publicly available Ginnie Mae data as well as private sources.

HECM Endorsement Analytics – September 2021

October 13th, 2021

4,326 HECM loans were endorsed in September, bouncing back after last month to the average pace seen for the past year and half. Our report can be found here: NV Endorsement 2021_09. Of the top lenders, AAG endorsed 1,445 loans, increasing endorsement volume 21+% from August, while PHH endorsed 303 HECMs, more than doubling last month’s 143. Total volume increased 17% versus August, another reminder that one month of data, especially endorsement count, is not telling of a market trend.

HUD’s August Endorsement Snapshot Report is now available on its website. Volume dropped across all product types, but HECM-to-HECM refis remained close to 50% of all endorsements.

New View Advisors continues to offer its Who Buys What From Whom (WBWFW) endorsement report subscription. The report compiles publicly available Ginnie Mae data to show which HMBS issuers buy HECMs from which lenders.

The WBWFW report includes:

*Top Originators – a ranking by original HECM UPB of all lenders over the last twelve months
*WBWFW – an alphabetical cross-reference between every lender and the HMBS issuer that securitizes its loans
*Top 100 Trends – a breakdown of loan sales by month, by Top-100 lender, by HMBS issuer.

Edited samples from this month’s WBWFW report are at the end of our endorsement writeup. These reports together provide accurate insight for sales and marketing teams to learn just who’s buying what from whom. The dataset is more complete and timely than what endorsement analysis alone can show.

HMBS September 2021 Part II: Big Summer Concludes

October 13th, 2021

Outstanding HMBS rose to a record $56.7 billion in September 2021, as high levels of both issuance and HECM loan payoffs continued. HMBS payoffs once again exceeded $1 billion, for the seventh month in a row. Outstanding HMBS increased by about $106 million. These big numbers reflect continued high levels of refinancing, as low rates and high home prices allow more homeowners to borrow new, larger HECM loans.

In 2019, HMBS posted its lowest annual issuance total in five years, but 2020’s low interest rates and higher lending limits boosted production to a near-record $10.6 billion. As mentioned in previous blogs, for the first nine months of 2021, HMBS new issuance already exceeds $9 billion, on pace to set a new annual volume record.

Our friends at Recursion broke down the prepayment numbers further: last month’s 98% MCA mandatory purchases totaled $238 million, only 19.8% of the total.

New View Advisors compiled this data from publicly available Ginnie Mae data as well as private sources.

New View Advisors and Recursion Reverse Mortgage Prepayment Indices – September 2021

October 12th, 2021

New View Advisors and Recursion September 2021 expanded HECM reverse mortgage prepayment indices can be found here: New View Advisors Recursion Cohort Speeds 09_2021. The indices are derived from underlying HECM data in HMBS made public by Ginnie Mae, as well as private sources. This new expanded set of prepayment data is calculated using dollar principal balance, not unit count.

The enhanced data set shows current trends in prepayment activity by product type and Principal Limit Factors (PLFs), and for current 12-month LIBOR PLFs by Expected Rate. HECM loans with higher Expected Rates originated in the year or so prior to the precipitous fall in interest rates brought on by the pandemic are experiencing higher prepayment rates. Therefore, we segregate indices for recent production 12-month LIBOR PLFs into Expected Rates greater than 4% and Expected Rates less than or equal to 4%.

Prepayment speeds are expressed as annualized percentages in three categories: Total Payoffs, Payoffs Other Than Assignments, and Payoffs from Assignment. For each category, we calculate the 1-month, 3-month, 6-month and 12-month CPR, or annual rate of prepayment.

For HMBS pools backed by adjustable rate HECMs using the Constant Maturity Treasury (CMT) index, prepayment speeds will continue to populate as more of these HMBS are issued.

2021Q3 HMBS Issuer League Tables – Annual Volume Record in the Crosshairs

October 1st, 2021

AAG continued its #1 HMBS issuer ranking for the first nine months of 2021 with $2.585 billion of issuance and 28% market share. FAR stayed close behind in second with $1.985 billion issued and 21.4% market share. Longbridge eked past RMF to third with $1.530 billion issued and 16.5% market share. RMF at fourth had $1.506 billion issued with a 16.2% market share. PHH Mortgage again rounded out the Top Five, with $1.120 billion and a 12% market share. These five issuers continue to account for 94% of all HMBS issuance, consistent with past performance. There are 14 active HMBS issuers year to date, though Mutual of Omaha and The Money House did not issue in the third quarter.

2021Q3 saw $3.45 billion of HMBS issued, up 9% from last quarter’s $3.16 billion and the third consecutive quarterly issuance record. With three months to go, the industry is on track to exceed $12 billion of HMBS issuance in 2021.

New View Advisors compiled these rankings from publicly available Ginnie Mae data as well as private sources.

HMBS September 2021: Try to Remember This Kind of September

October 1st, 2021

HMBS issuers posted record totals in September, with the highest monthly issuance volume this year, and another record for new loan pools. They issued just over $1.2 billion in new HMBS, as refinancing activity continued to be strong. 107 pools were issued in September, including 47 first-participation CMT pools. Before January 2021 no new first-participation CMT pools had been issued for many years.

The all-time HMBS annual volume year is 2010, with $10.8 billion issued. That was when Principal Limits were high and no borrower financial assessment safeguards had been established. That record will fall this year, as nearly $9.3 billion was issued in the first nine months.

September’s production of original new loan pools was a record $1.03 billion, easily surpassing August’s $880 million, July’s previous-record $937 million, June’s $823 million, May’s $862 million, April’s $900 million, March’s $671 million, February’s $693 million, and January’s $552 million. Approximately $693 million in original new loan pools were issued in September 2020.

September issuance divided into 60 first-participation or original pools, and 47 tail pools. Original pools are those HMBS pools backed by first participations in previously uncertificated HECM loans. Tail HMBS issuances are HMBS pools consisting of subsequent participations. Tails are not from new loans, but they do represent new amounts lent. Tail HMBS issuance is essential for HMBS issuers to finance their monthly advances, such as borrower draws and FHA mortgage insurance premiums. Last month’s tail pool issuances totaled $189 million, within the typical range.

New View Advisors compiled this data from publicly available Ginnie Mae data as well as private sources.