Archive for the ‘Uncategorized’ Category

HECM Endorsement Analytics – December 2021

Friday, January 7th, 2022

December finished with a record monthly HECM endorsement count for 2021 of 5,218 loans, bringing the total annual endorsement count to 53,020 units, exceeding by 18.7% the 44,661 HECMs endorsed in 2020. AAG, RMF and FAR accounted for 52.3% of all HECMs endorsed in 2021, slightly higher than the 50.7% seen in 2020. Our report can be found here: NV Endorsement 2021_12.

HUD’s November Endorsement Snapshot Report was just released on its website. “HECM for Refinance” remains at more than 50% of all HECMs endorsed in the month.

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.

2021 Full Year HMBS Issuer League Tables – Portfolio Sale Upends the Rankings

Tuesday, January 4th, 2022

Reverse Mortgage Funding became the #1 HMBS issuer in 2021, with $4.09 billion issued and near 31% market share, due in part to its acquisition of AAG’s HMBS portfolio during the quarter. Ginnie Mae gives full issuance credit to the surviving/purchasing HMBS Issuer. FAR remained in second with $2.83 billion issued and 21.4% market share, Longbridge was third with $2.18 billion issued and 16.5% market share, and PHH was fourth with $1.67 billion issued and 12.7% market share. AAG fell to fifth, rounding out the Top Five, with $1.64 billion and a 12.4% market share. Giving credit to AAG for its full-year book of business, AAG annual issuance volume would have been approximately $4.23 billion.

Once again, these same five issuers accounted for 94% of all HMBS issuance, consistent with past performance. There were 14 active HMBS issuers in 2021, though Nationstar and The Money House did not issue in the fourth quarter. Expect Nationstar to drop from the League Tables in 2022 as they exited the business in December.

2021Q4 saw $3.91 billion of HMBS issued, up 13% from last quarter’s $3.45 billion and the fourth consecutive quarterly issuance record. As mentioned in many of our previous blogs, $13.19 billion of HMBS issuance in 2021 easily surpassed 2010’s previous record $10.8 billion, a time when Principal Limits were high and Financial Assessment non-existent.

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

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

Thursday, December 9th, 2021

New View Advisors and Recursion November 2021 expanded HECM reverse mortgage prepayment indices can be found here: New View Advisors Recursion Cohort Speeds 11_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.

HECM Endorsement Analytics – December 2020

Tuesday, January 5th, 2021

HUD’s December 2020 HECM Endorsement Summary Report shows a moderate rebound of endorsement activity to finish the year, our summary of which can be found here: NV Endorsement 2020_12. 4,097 HECM loans were endorsed in December, a 15% increase over November. Endorsements totaled 44,661 units in 2020, compared to 32,472, 41,683, and 55,239 units in 2019, 2018, and 2017 respectively.

The HECM market has become further concentrated between a few large lenders. During 2020, the top four originators accounted for 58.7% of all HECMs, up from 54.4% in 2019. Apart from One Reverse Mortgage, which ceased HECM lending in February, there have been no major shifts in originator rankings.

One notable development for 2020 was the increase in HECMs accounted for as a refinancing. HUD’s November Endorsement Snapshot Report shows refinancings accounting for almost 25% of HECM endorsements. The same metrics for 2019, 2018, and 2017 were 7%, 7%, and 16%, respectively.

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 – June 2020

Wednesday, July 1st, 2020

HUD’s June 2020 HECM Endorsement Summary Report shows another strong print with a total of 4,209 endorsements, our summary report of which can be found here: NV Endorsement 2020_06. June is lower than May’s 5,038 count, but as mentioned previously the last two months’ volume figures have been skewed by disruptions caused by COVID-19. During the six months prior to the pandemic, average monthly endorsements ran slightly over 3,000 units per month.

Based on 12-month endorsement totals, there is little change in the ranking of top lenders. Of note, High Tech Lending saw a sharp increase in volume, to 169 units from last month’s 24. One Reverse Mortgage had just 1 endorsement as it winds down business.

HUD’s May Endorsement Snapshot Report is now available on its website. The report echoes last month’s Endorsement Summary Report and displays a strong rebound in activities from April to May across the board.

Refinance volume continues to ramp higher. After taking a breather in May, the refinance endorsement count reached 891, the highest monthly total since January 2018. Refinance volume accounts for about 18% of all endorsements, a trend that started in late 2019.

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

HMBS April 2020 Part II: Float Remains in Equilibrium Just Above $54 Billion

Sunday, May 10th, 2020

Outstanding HMBS rose by $185 million in April, as payoffs fell and issuance rose. Payoffs totaled approximately $800 million, down $50 million from last month. For several months, total outstanding HMBS has stayed at about $54 billion, in a state of equilibrium where new issuance and interest roll-up roughly equal payoffs.

In 2019, HMBS posted the lowest annual total in five years. Until last month, low interest rates and a higher lending limit boosted production significantly, while Mandatory Buyouts continue to fall. With the current Coronavirus pandemic crisis, financial markets are dislocated: will this upset the equilibrium at last?

We predicted continuing declines in Mandatory Buyouts, and April was case in point, with Buyout dollar volume again at its lowest level in nearly 5 years. “Peak Buyout” was an echo of the peak issuance from 2009 through the first half of 2013. Much of this production has already been repurchased by issuers, or repaid by borrowers. Many HECM loans continue to reach their buyout threshold, equal to 98% of their Maximum Claim Amount (“MCA”), but Peak Buyout is long gone.

Our friends at Recursion broke down the prepayment numbers further: the 98% MCA mandatory purchases totaled $400 million, the lowest amount in nearly 5 years. This continues the downward trend from the buyout peak in the third quarter of 2018, which averaged over $750 million in Mandatory Purchases per month.

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

HECM Endorsement Analytics – March 2020

Thursday, April 2nd, 2020

HUD’s March 2020 HECM Endorsement Summary Report shows a total of 2,913 endorsements, 14% lower than last month’s 3,386, despite rates heading still lower again. Our summary report can be found here: NV Endorsement 2020_03.

Among the big movers, AAG endorsed 799 loans, up 16% from last month’s 691 loans. Liberty Reverse Mortgage endorsed 235 loans, less than half of last month’s 582 unit count. Mutual of Omaha Mortgage’s endorsement count also slipped, from 177 to 135 units month over month.

HUD’s February Endorsement Snapshot Report is now available on its website. Liberty sponsored 595 loans originated by another lender. FAR, RMF, and AGG followed behind with 399, 236, and 137 loans, respectively. Fairway sold 150 loans to another sponsor, more any other month during the past 12 months. Ennkar continued to be a strong seller again this month with 68 loans.

Of course, the current reports barely reflect any impact the Coronavirus pandemic will have on reverse mortgage originations starting in mid-March. Lending activities have stalled, and the secondary market has pulled back for HMBS, HREMIC, and related transactions. Expect materially weaker prints in the coming months.

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 data to show which HMBS issuers buy HECMs from which lenders. The WBWFW spreadsheet 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 February 2020 Part II: HMBS Float Remains in Equilibrium Just Above $54 Billion

Tuesday, March 10th, 2020

Outstanding HMBS rose by $72 million in February, as lower payoffs were once again balanced by a strong issuance month. Payoffs totaled approximately $800 million, down about $100 million from last month. Total outstanding HMBS remains at $54.1 billion, an equilibrium in which new issuance and interest roll-up roughly equal payoffs.

In 2019, HMBS posted the lowest annual total in five years. However, low interest rates and now a higher lending limit have boosted production significantly, while Mandatory Buyouts continue to fall. How long can this equilibrium last?

We predicted continuing declines in Mandatory Buyouts, and February was a case in point, with Buyout dollar volume at its lowest level in nearly 5 years. “Peak Buyout” was an echo of the peak issuance from 2009 through the first half of 2013. Much of this production has already been repurchased by the issuers or repaid by borrowers. From now on, billion-dollar-plus payoff months will be the exception rather than the rule. Many HECM loans continue to reach their buyout threshold, equal to 98% of their Maximum Claim Amount (“MCA”), but Peak Buyout is long gone.

Our friends at Recursion broke down the prepayment numbers further: the 98% MCA mandatory purchases totaled just $421 million, the lowest amount in nearly 4 years. This continues the downward trend from the buyout peak in the third quarter of 2018, which averaged over $750 million in Mandatory Purchases per month.

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

2019 HMBS Issuer League Tables – No Surprises

Friday, January 3rd, 2020

AAG kept its frontrunner HMBS issuer position throughout 2019, ending the year with $1.97 billion of issuance and 24% market share. It’s worth noting AAG’s issuance totals are all new originations and tails, with no highly seasoned pools issued. Longbridge finished in second place with $1.72 billion of issuance and 21% share, including more seasoned HMBS issuance in Q4. RMF stayed in third with $1.50 billion issued and 18% market share, which includes issuance assumed from the Live Well Financial bankruptcy. FAR was fourth with $1.21 billion issued and 14.7% market share, and PHH Mortgage Corp placed fifth with $962 million and 11.7% market share. These five issuers accounted for 89.2% of all issuance, inching closer to the Top-5 concentration high of 91% at year-end 2018. There was no change in rankings order from Q3, and all 14 HMBS issuers were active during the quarter.

2019Q4 saw $2.28 billion of HMBS issued, down slightly from Q3’s $2.33 billion, but on the upward trajectory seen all year. Nonetheless, at $8.26 billion, annual industry volume was off almost 14% from a year ago. Total HMBS issuance in 2018 was $9.58 billion.

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

HMBS September 2019: Back to School Special

Tuesday, October 1st, 2019

HMBS issuance totaled nearly $610 million in September, as lower rates continued to strengthen new production. 83 pools were issued in September, including about $393 million of new unseasoned HECM first participation pools, the highest monthly total for new production this year. For comparison, HMBS issuers sold 104 pools totaling $588 million in September 2018.

However, reverse mortgage lenders still face reduced volume, primarily due to the new lower PLFs for Home Equity Conversion Mortgages (“HECMs”) in effect since the beginning of fiscal year 2018. Even with this month’s issuance, the HMBS market is on pace to issue less than $8 billion in calendar 2019. HMBS issuance totaled $9.6 billion in 2018 and $10.5 billion in 2017.

September’s production of original new loan pools was about $393 million, compared to $390 million in August, $321 million in July, $331 million in June, $325 million in May, $300 million in April, $277 million in March, $274 in February, and $304 million in January. Last month’s tail pool issuances totaled $217 million, on the low end of the range of recent tail issuance. As we predicted two months ago, the industry is likely seeing the benefit of lower interest rates helping new origination volume.

September 2019 issuance divided into 28 First-Participation or Original pools and 55 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 can generate profits for years, helping HMBS issuers during challenging times.

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