HMBS July 2021 Part II: Summer of Big Numbers Continues

Outstanding HMBS rose to a record $56.6 billion in July 2021, as high levels of both issuance and HECM loan payoffs continued. HMBS payoffs once again exceeded $1.1 billion. Outstanding HMBS rose by about $90 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 in 2020, low interest rates and a higher lending limit boosted production significantly to a near-record $10.6 billion. After seven months, HMBS new issuance already totals almost $7 billion, on pace to exceed $11 billion in 2021.

Our friends at Recursion broke down the prepayment numbers further: last month’s 98% MCA mandatory purchases totaled $222 million, only 19.6% of total payoffs.

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

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