HMBS December 2021: Issuers Close Books on Record Breaking Year

HMBS issuers rewrote the records books again in December. Nearly $1.5 billion in new HMBS was issued, finishing a record year and setting a record for new original loan pools for the third month in row. Refinancing activity continued to be strong. 123 pools were issued in December, including 54 first-participation CMT pools. Before January 2021 no new first-participation CMT pools had been issued for many years.

HMBS issuance totaled $13.2 billion for 2021, an all-time record, easily surpassing 2010, the previous HMBS record year with $10.8 billion issued.

December’s production of original new loan pools was a record $1.14 billion, edging out November’s $1.08 billion and October’s $1.07 billion. Approximately $878 million in original new loan pools were issued in December 2020.

December issuance divided into 67 first-participation or original pools, and 56 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 $335 million, well above the typical range.

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

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