Archive for the ‘HECM Program’ Category

HECM Endorsement Analytics – March 2021

Monday, April 5th, 2021

March HECM Endorsements came in at 4,220 units. Over the past year, HECM endorsement activity has been fairly stable, averaging slightly below 4,000 endorsements each month. Our analysis can be found here:  NV Endorsement 2020_03.  The top eight originators now account for 79% of endorsement volume. American Advisors Group has approximately one third of the market, followed by Finance of America Reverse and Reverse Mortgage Funding, each accounting for approximately 10% of endorsement count volume.

HUD’s February Endorsement Snapshot Report is also now available on HUD’s website. HECM to HECM refis dropped slightly, to 1,434 endorsements from January’s record high 1,651 endorsements. 10-year treasury rates continued to climb in March, however HECM endorsement volume does not yet reflect any impact from rising interest rates.

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.

HMBS March 2021; HECM MMI Fund: As Predicted

Thursday, April 1st, 2021

HMBS issuance remained fairly strong at $858 million in March 2021, the first month of the post-LIBOR era. February 2021 was the last month in which Ginnie Mae allowed pooling of new HMBS pools backed by first participations of LIBOR-based HECMs. The Constant Maturity Treasury “CMT” index is now the only index for new adjustable rate HECM loans and will remain so until a transition to another index, likely the Secured Overnight Financing Rate, or “SOFR.” 91 pools were issued in March, including 35 first-participation CMT pools. Before January 2021 no new first-participation CMT pools had been issued in many years.

Earlier this week, the HECM industry received good news that FHA’s MMI Fund now shows a surplus of 2.39% for the HECM portion of the Fund. This report comes only four months after FHA claimed the HECM program was a drag on its mortgage insurance program and was being “subsidized” by their forward mortgage program. New View Advisors was skeptical of this pessimistic view and made our case December 7, 2020: https://www.newviewadvisors.com/commentary/forward-mortgage-does-not-subsidize-reverse-mortgage/. We predicted FHA would soon show a significant HECM surplus, and that has already come to pass. FHA should now be under less pressure to take measures to reduce HECM risk, program changes that could have taken the form of higher Mortgage Insurance Premiums (MIP) or lower lending limits.

A record $10.6 billion in HMBS was issued in 2020, easily beating 2019’s total of $8.3 billion and 2018’s $9.6 billion. HMBS issuance in the first quarter of 2021 totaled about $2.7 billion, but issuers may find it difficult to maintain this pace in the face of rising interest rates.

March production of original new loan pools was $671 million, compared to February’s $693 million, January’s $552 million, December’s record $878 million, and November’s $765 million. Approximately $455 million in original new loan pools were issued in March 2020.

March issuance divided into 43 first-participation or original pools, and 48 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, FHA mortgage insurance premiums, etc. Last month’s tail pool issuances totaled $187 million, below the typical $200-$250 million range.

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

HECM Endorsement Analytics – February 2021

Wednesday, March 10th, 2021

2021 February HECM Endorsements came in at 4,066 units. Losing just one business day from January, February endorsements fell 10.4% over last month’s 4,539 units. Despite this drop, the top two lenders expanded their leads: American Advisors Group had 1,374 endorsements versus 1,287 in January, and Finance of America Reverse had 465 endorsements versus 433 in January. The next five lenders all saw decreases in unit count. Reverse Mortgage Funding endorsed 376 loans, 38% fewer than January, though it’s worth pointing out January was an endorsement count high water mark for RMF. Our summary of HUD’s report can be found here: NV Endorsement 2021_02.

HUD’s January Endorsement Snapshot Report is also now available on its website. HECM to HECM refis hit a record 1,651 endorsement in January. With long term interest rates at their highest levels since early 2020, it remains to be seen if rising rates will dampen HECM refinancing, and possibly HECM lending in general.

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.

HECM Endorsement Analytics – January 2021

Tuesday, February 2nd, 2021

HECM Endorsements had a strong start in 2021; HUD’s HECM Endorsement Summary Report shows 4,539 endorsements in January, an 10.8% increase over December. In 2020, only April had a higher number of endorsements at 5,038. Our summary of the report can be found here: NV Endorsement 2021_01.

A handful of lenders contributed significantly to January’s increase in endorsements, notably Reverse Mortgage Funding and Longbridge Financial, with 603 and 280 endorsements respectively, representing increases of 39% and 47% over December.

Geographically, the west coast continues its domination. Field offices in Los Angeles, Phoenix, Seattle, Santa Ana, and San Francisco each eclipsed 200 endorsements in January. Denver is the only other field office in that category, with 289 endorsements.

HUD’s December Endorsement Snapshot Report shows another big refi month, with 38% of all HECM endorsements categorized as a refinancing. The same report shows that despite the recent uptick in long term treasury rates, HECM interest rates continued to trend lower.

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.

Forward Mortgage Does Not Subsidize Reverse Mortgage

Monday, December 7th, 2020

This blog began in 2009 with an entry entitled “The Trouble with HECM.” What was the Trouble we predicted? Is FHA’s Home Equity Conversion Mortgage (“HECM”) reverse mortgage program in for more trouble? The reader of FHA’s recent report, the “Federal Housing Administration’s Annual Report to Congress Regarding the Financial Status of the FHA Mutual Mortgage Insurance Fund,” would probably think so. The report depicts FHA’s HECM Reverse Mortgage Portfolio and Forward Mortgage Portfolio, respectively, as the Goofus and Gallant of mortgage loans. In no fewer than three instances does the report describe the Gallant Forward Mortgage Portfolio as “subsidizing” the “volatile” Goofus Reverse Mortgage Portfolio. Gallant Forward Mortgage is an earnest young first-time homebuyer, whereas Goofus Reverse Mortgage is a grumpy old man with anger issues.

In this blog entry, we address these questions by discussing the FHA report, especially as it relates to HECM. We will conclude with three major points:

(1) The HECM program’s outlook has improved significantly, and may be on the verge of returning to surplus;
(2) FHA’s forward mortgage program’s delinquencies have risen sharply at a time when HECM defaults remain low; and
(3) Therefore, FHA’s forward mortgage portfolio cannot be said to subsidize its HECM reverse mortgage portfolio. FHA should improve its disclosure to show where its risk really is, prospectively and historically, for both HECM and forward mortgage.

We wrote our first blog entry around the time when the HECM program began to show a small deficit. Prior to that, it was fashionable to say that the HECM program subsidized the FHA’s forward program. The HECM program had a negative subsidy of $462 million in FY 2008, down from $697 million in FY 2007, but still profitable to FHA. Forward mortgages, on the other hand, were in the midst of their worst crisis since the Great Depression.

In 2009, the first large cohorts of HECM loans had not yet been stress-tested, as HECM volume before the crisis years of 2007-2009 were relatively small. But as the HECM program grew, the weakness in the program’s design was revealed. In 2009, we predicted the HECM portfolio was headed for a big loss, due to very high loan-to-value ratios (“LTVs,” also referred to as “Principal Limit Factors,” or “PLFs”). Back then, it was possible for an 80 year-old HECM borrower to borrow 78% of their home value, without any financial assessment or limitation on the initial draw amount. It was only a matter of time until many of these loans were underwater.

Our “Trouble with HECM” blog predicted FHA’s small HECM deficit would grow and could be potentially very large. Sure enough, in FHA’s FY 2012 MMI Report, the surplus of a few years earlier had been replaced by a deficit, an Economic Net Worth of negative $2.8 billion (Financial Status of the FHA Mutual Mortgage Insurance Fund, p. 35). The trouble had come.

Since then, FHA improved the design of the HECM program. PLFs were lowered, the initial draw amount was restricted, and Financial Assessment (“FA”) was enacted. The 80-year-old who could receive a 78% LTV HECM in 2009 could then borrow no more than 64%, even less depending on interest rates. As we have analyzed in previous blogs, the implementation of Financial Assessment also materially reduced the number of HECM borrowers unable to keep current tax and insurance payments. Today, default rates for FA-era HECMs are a fraction of the default rates for pre-FA era HECMs.

These FHA reforms have two major implications. First, there is a good and bad portion of FHA’s HECM book, the high-LTV, pre-FA loans, and the low-LTV, FA loans. Second, with each passing day, the old riskier HECMs pay off, good new less-risky HECMs are added, and the portfolio percentage comprised of FA loans grows larger. According to this year’s FHA report (p. 110), about half the loans in the HECM portfolio were originated before FY 2015. At a certain point in the not-too-distant future, FHA’s HECM book will consist almost entirely of FA-era loans.

So are HECMs out of trouble yet? That brings us to this year’s FHA MMI report.

Types of Loss: Type I and II; Realized versus Projected

At FY-end 2020, FHA insures HECM loans totaling $62.638 billion: this amount is known as the Insurance-in-Force (or “IIF,” p. 118). During FY 2020, FHA paid $6.22 billion in HECM claims, down from $9.55 billion in FY 2019 (p. 47).

HECMs claims are divided into two types: Type I and Type II. In FY 2020, Type I Claims totaled about $500 million; the remaining $5.7 billion were Type II Claims. To the reader untutored in the idiosyncrasies of the HECM program, the magnitude of the Type II Claims seems gigantic: at nearly $6 billion, they approach almost one-tenth of the IIF and nearly a year’s worth of HECM production. However, Type I Claims represent realized losses to FHA, whereas Type II Claims do not.

Type I Claims

Type I Category Claims “represents the dollar volume of claims generated when the borrower no longer occupies the home, and the property is sold at a loss, with the mortgage never being assigned to the Secretary of HUD” (p. 47). These claims are realized losses for FHA, which insures investors against these crossover losses. For FY 2020, Type I Claims equaled about 0.75% of the total outstanding balance of HECMs insured by FHA (p. 47 and p. 111). Stated otherwise, these are realized losses incurred by HMBS issuers and HECM investors and reimbursed by FHA during the fiscal year.

The rate of Type I Claim losses each fiscal year has fallen steadily since FY 2015 (p. 47 and Table B-25 on p. 111). Barring significant economic problems, this trend will almost certainly continue as the HECM program portfolio quality improves, as pre-FA loans pay off, and FA loans are added.

Type II Claims and the Secretary’s Notes

Type II Claims are very different. The Type II Claim is a sale, or “assignment,” of an Active HECM loan from an investor to HUD when the balance of that loan reaches 98% of its Maximum Claim Amount, or “MCA.” The MCA is a dollar amount, determined at the time of the HECM loan’s origination, equal to the lesser of the property value and the HECM lending limit. By “Active,” the HECM borrower is alive, and the loan is not in default for any reason. As the report puts it, “The Type II Claim represents the dollar volume of claims resulting from the assignment of the mortgage to the Secretary of HUD when the mortgage reaches 98 percent of MCA” (p. 47).

Therefore, the Type II Claim amount does not represent a realized loss; it is a loan sale in which the investor assigns a HECM loan to HUD. HUD pays a price of 100%, or par. Again, HUD will not purchase any HECM loan that is matured or in default. Investors therefore benefit from a put option that shields them from losses and shortens the otherwise very long duration of HECM loans. HUD then holds the loan in its “Secretary’s Notes” portfolio until that loan pays off. Through this Claim Type II mechanism, HUD has become a very big investor in highly seasoned HECM loans. The Secretary’s Notes portfolio now holds nearly 150,000 HECM loans (FHA presentation to NRMLA p. 24), totaling an estimated $30 billion in unpaid balance.

Due to the terms of the Type II Claim assignment, these loans are positively selected with respect to credit, but negatively selected with respect to LTV. At the time of assignment, HUD may be buying a loan that is underwater (a loan with an LTV exceeding 100%), however, for most HECM loans this is probably not the case, as the underlying properties have benefitted from several years of home price appreciation.

It is worth noting these loans have interest rates well above the treasury funding rate, and the borrower’s mortgage insurance premium (“MIP”) rate continues to accrue on top of the interest rate. Whether HUD can collect that interest accrual, or even the loan balance it paid for, depends on the LTV. For loans in the Secretary’s Notes portfolio that are not underwater at the time of loan payoff, HUD can collect the full loan amount and make a decent profit. For loans that are underwater at the time of loan liquidation, HUD suffers a realized crossover loss equal to the excess of the loan balance over the property value, plus any related expense.

The latest FHA report does not disclose much data on the Secretary’s Note portfolio itself; plus, this disclosure has varied from year to year. However, reading between the lines of the report, it is clear that the majority of expected future HECM MMI fund losses are concentrated in the Secretary’s Notes portfolio.

If the Type I Claim Net Present Value (“NPV”) loss is 0.75% per year (i.e. Type I Claims per year/IIF), and continues to decline, we estimate that the total Type I Claim-related loss is approximately 2% of IIF in present value, given the duration of the non-assigned portfolio. Using FHA’s own estimate of the total “Net Present Value of loss” of 10% of IIF (p. 118), less the estimated Type I Claim-related NPV of loss of 2% of IIF, a total Type II-related NPV loss equal to 8% of IIF is projected. Said otherwise, a total NPV loss of $5 billion is projected for the entire Secretary’s Notes portfolio, not just for FY 2020.

This $5 billion loss is 15% – 20% of the total Secretary’s Notes portfolio. Such a high loss severity is possible with a combination of adverse factors, such as high LTVs, expenses, inflated appraisals, and servicing issues. The FHA report does not provide empirical data showing the portfolio’s recent performance, such as loss severities of recent loan liquidations. If it did, we suspect that it would show that HECM’s troubles were largely caused by high-LTV pre-FA loans, a problem that is melting away as those loans pay off.

FHA should show more detailed performance data for the Secretary’s Notes, by fiscal year, showing dollar amounts and units outstanding, interest accrued, payoffs, realized losses from those payoffs, payoffs without loss, etc. The FHA report should also show realized losses by all product types, both forward and reverse. Only then can the reader make proper comparisons.

It is clear that for HUD’s HECM program, the greater portion of its risk resides in the high LTV loans in the Secretary’s Notes portfolio. Nearly all of these loans are from the pre-FA era. The oldest FA loan is barely five years old; very few have been assigned to HUD. Under the current trend of falling number of assignments, and rising number of payoffs, the Secretary’s Notes portfolio will probably peak sometime in 2022 with 170,000 – 180,000 loans. As this portfolio shrinks, so will HUD’s losses.

Models of Volatility

In the section “MMI Fund Capital Ratio Sensitivity to Modeling Assumptions“ (p. 67), the report discusses the rapidly rising delinquencies in the forward mortgage portfolio, and relates this to the COVID crisis and forbearance provisions allowed by the CARES Act. It discusses some stress-case scenario sensitivity analysis for both forward mortgages and HECMs. So far, the recent economic stress has manifested itself in the forward mortgage program, not the HECM program, where default rates remain low.

The FHA report claims that forward mortgage subsidizes reverse mortgage based on the estimated present values of future losses, but it’s worth noting two anomalies in these estimates (Table C-7 and C-8, p. 118). First, FHA’s estimate for its forward portfolio losses was little changed from last year, despite the COVID crisis and the massive increase in delinquencies. How is this possible?

Second, FHA’s estimate of future HECM losses has declined significantly in each of the past two years. FHA’s estimate of HECM NPV losses topping $21 billion in FY 2018 was reduced to an estimate of $13 billion last year and now $6.3 billion (p. 118). The decline each year is approximately equal to one year of HECM production. An accompanying report, “Fiscal Year 2020 Independent Actuarial Review of the Mutual Mortgage Insurance Fund” (the “Actuarial Report”), shows a similar decline, including a $2.4 billion increase in NPV due to “Impact of Assumption Change” and an $8.3 billion increase due to “Impact of model change.”

No change in economic conditions, program design, or portfolio composition, however favorable, should cause changes of that magnitude. This begs the question, which is really more volatile, the HECM program, the forward mortgage program, or the modeling assumptions?

Conclusion: The Essence of Subsidy

The FHA FY 2020 MMI Fund report states that projected reverse mortgage losses are falling, forward delinquencies are rising rapidly, and HECM is responsible for the entire $6 billion improvement in the fund’s loss reserve. Yet, it concludes that its forward mortgage program subsidizes its HECM reverse mortgage program. FHA bases this claim on prospective losses, but this will likely be proved wrong if current trends continue. Examining FHA’s own report, it appears that prospective losses are a rapidly moving target, changing significantly year to year due to changes in economic conditions, portfolio composition, and modeling assumptions.

We think Forward Mortgage does not subsidize Reverse Mortgage now any more than Reverse Mortgage subsidized Forward Mortgage in 2009. A true subsidy would mean outsized realized HECM losses, and a compelling case that this will continue. This is not demonstrated in the report. In fact, given current trends, a reversal of fortune is possible, in which the HECM program returns to surplus and forward mortgage enters a deficit.

Any loan portfolio can be stratified into a superior performing portion and an inferior performing portion, with the former “subsidizing” the latter. Within the reverse mortgage portfolio, we could say reverse mortgages owned by investors and issuers subsidize the Secretary’s Notes, or that post-Financial Assessment loans subsidizes Pre-Financial Assessment loans. The question is: which characteristic is the most meaningful? Historically, the Loan-to-Value Ratio has proven to be the most important characteristic. Low-LTV loans subsidize high-LTV loans, for both Reverse Mortgage and Forward Mortgage.

Under current trends, the HECM program should be making money for taxpayers by the end of FY 2021. In fact, assuming the Actuarial Report’s lower loss estimate, the HECM program is already in the black (Actuarial Report (Revised), p. 12). By the end of FY 2022, about 70% of the HECM Insurance-In-Force will consist of post-FA HECM loans. The cash flow and Economic Net Worth of the HECM program could then be strongly positive.

HECM Endorsement Analytics – November 2020

Wednesday, December 2nd, 2020

HUD’s November 2020 HECM Endorsement Summary Report shows an ever-slowing endorsement trend, with 3,561 units tallied. Our analysis of the Summary Report can be found here: NV Endorsement 2020_11. Endorsement volume continues to trend lower as 2020 year-end approaches. Compared to April 2020, with a peak of 5,038 endorsements, the industry is now seeing endorsement volume approximately 30% lower, this despite near record HMBS issuance volume. The sudden, forced transition away from LIBOR would be one plausible explanation.

High Tech Lending originated 107 loans that were endorsed, doubling its usual monthly origination; Cherry Creek Mortgage and Traditional Mortgage Acceptance had zero and four loans endorsed respectively, notably less than what each typically originates.

HUD’s October Endorsement Snapshot Report is also now available on its website. Based on this report, HECM For Refinance accounts for over 34% of total endorsements, its largest market share to date. Traditional HECM accounts for 61% of total endorsements, and HECM For Purchase accounts for the remaining 5%.

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.

HECM Endorsement Analytics – October 2020

Monday, November 23rd, 2020

HUD’s October 2020 HECM Endorsement Summary Report totals 3,737 endorsements, dropping 5% from last month’s 3,937 tally. Nonetheless, endorsement count maintained its steady pace for the 5th month in a row.  Our analysis can be found here: NV Endorsement 2020_10.

Most of the top originators experienced a drop in endorsements in sync with the overall decline in volume; the number of loans endorsed by AAG, Fairway Independent Mortgage, and Open Mortgage each dropped 10+% compared to the prior month; however, Reverse Mortgage Funding and Mutual of Omaha Mortgage saw their endorsement count each gain by more than 7%.

HUD’s September Endorsement Snapshot Report is now posted on its website. Wholesale sponsors sponsored a total of 1,763 loans originated by another party. Nearly 90% of that total were sponsored by the top six sponsors. Finance of America Reverse continued to be the leading player in this category, sponsoring 535 loans. Notably, new entrant South River Mortgage originated 106 loans originated by another party. While just entering the space midyear, its volume has been up each month and has had endorsed 231 HECMs.

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 the WBWFW report are included at the end of our 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.

HECM Endorsement Analytics – September 2020

Monday, October 5th, 2020

HUD’s September 2020 HECM Endorsement Summary Report totals 3,937 endorsements, a slight drop from last month’s 4,007 but still a pace not seen since FY2017. New View Advisors’ summary report can be found here: NV Endorsement 2020_09. Endorsements have been stable for the last four months, fluctuating by no more than 300 units a month.

Endorsements by region mirror the national dynamic; none of the home ownership centers or major field offices experienced any material change in volume. Among the top originators of note, Open Mortgage endorsed 236 loans, a 33% increase from August; Longbridge endorsed 167 loans, a 39% drop from August.

HUD’s August Endorsement Snapshot Report is now posted on its website. The Top-4 wholesale sponsors endorsed 1,109 loans originated by another party, a drop from last month’s 1,375 loans. Despite the drop, Longbridge’s wholesale increased 28% with 361 units compared to last month’s 281, and Open Mortgage increased its count 55% with 115 sponsorships compared to last month’s 74.

The August Snapshot Report also shows 1,120 endorsements labeled as HECM to HECM refis, 28% of total endorsements, nearly equal to the surge of refinancings from when FY2017 drew to a close three years ago. Ginnie Mae’s unexpected announcement last week ending LIBOR-indexed HMBS effective 2021 will likely alter the HECM to HECM refinance landscape, and impact HECM origination volume until a permanent replacement for LIBOR is established.

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.

HECM Endorsement Analytics – August 2020

Wednesday, September 2nd, 2020

HUD’s August 2020 HECM Endorsement Summary Report shows a fourth consecutive strong print month, with 4,007 endorsements, our summary report of which can be found here: NV Endorsement 2020_08. For May, June and July, monthly endorsement counts were 5,038, 4,209 and 4,256, respectively. For comparison, there were just 2,341 endorsements a year ago in August 2019.

All major originators had strong performance in August including AAG continuing its lead with 1/3 of all endorsements. Compared to a year ago, Longbridge and Open Mortgage both increased endorsement originations by approximately 50%, each moving from approximately 2% to 3% market share.

HUD’s July Endorsement Snapshot Report is also now posted on its website. Fairway remains the commanding leader, originating 1,572 loans sponsored by another party over the last 12 months, followed by Ennkar, Finance of America, All Reverse Mortgage and Advisors Mortgage, each originating more than 400 such loans during the period. FAR sponsored 4,730 loans originated by another party during the last 12 months, followed by Liberty, RMF and AAG. Each sponsored more than 2,000 such loans over the course of the year.

New View Advisors continues to offer its Who Buys What From Whom (WBWFW) report as part of this endorsement report subscription. Edited samples from this month’s WBWFW report are at the end of our endorsement writeup. The dataset is more complete and timely than what endorsement analysis alone can show.

HECM Endorsement Analytics – July 2020

Monday, August 3rd, 2020

HUD’s July 2020 HECM Endorsement Summary Report shows no signs of HECM endorsements slowing down: NV Endorsement 2020_07.  July closed out with 4,256 endorsements, the third consecutive month over 4,000. The last time this happened was in the fourth quarter of 2017, during the surge of volume associated with Mortgagee Letter 2017-12.

Based on 12-month endorsement totals, the ranking of the top 15 originators for July 2020 remained the same as June. As with HMBS issuance, AAG has a commanding lead over #2 RMF and #3 FAR. Longbridge saw unit count more than double in July, to 199 loans endorsed from last month’s 97. On the other hand, High Tech Lending’s endorsement count fell 44%, to 95 units from last month’s 169.

HUD’s June 2020 Endorsement Snapshot Report has now been posted on its website. While HUD’s Snapshot Report has a 1-month lag, it too shows no notable changes in trends with regard to endorsement volume, product mix, or loan characteristics.

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

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.