The HMBS new issue market was substantially off in December compared to November. HECM Mortgage-Backed Securities (“HMBS”) issuance totaled $457 million, $104 million lower than November’s $561 million. 79 pools were issued in December compared to 110 in November. With the exception of March 2023, December’s issuance is the lowest since 2014.
FAR was the top issuer in December with $157 million – down from November’s $185 million and October’s $216 million. Issuance from Longbridge dropped from $133 million in November to $90 million in December. Mutual of Omaha issued $83 million in December compared to $102 million in November. Ginnie Mae/RMF (aka “Issuer 42”) again issued no HMBS pools.
HMBS issuance set a record in 2022, with nearly $14 billion issued. Total issuance for 2023 is approximately $6.5 billion.
December’s original (first participation) production of $282 million was down from November’s $358 million.
The 79 pools issued in December consisted of 19 first-participation or original pools, 59 tail pools, and one pool with both new production and tail participations. 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. Last month’s tail pool issuances totaled $174 million, below the typical range.
Notable in the December HMBS issuance data are 25 pools with aggregate pool size less than $1 million. Issuers are taking advantage of Ginnie Mae’s provision to issue pools as small as $250,000. This represents $15.6 million of UPB that may not otherwise have been issued in December. Ginnie Mae issued APM 23-11 in September which allows participations from the same loan to be pooled more than once in the same month. Both of these provisions are designed to provide warehouse financing relief to issuers.
New View Advisors compiled this data from publicly available Ginnie Mae data as well as private sources.