HMBS March 2022 Part II: Refi Wave Refuses To Go Quietly

HMBS payoffs roared in like a lion in March, due to a refinancing wave that refuses to go away. March 2022 smashed previous records with $1.5 billion in payoffs. Because of these payoffs, outstanding HMBS fell to $57.59 billion, despite strong new issuance.

HECM borrowers continue to refinance in large numbers, assisted by a higher HECM lending limit (now $970,800) and surging home prices (nearly 20% year-over-year, according to some measures). So far, rising interest rates have failed to calm this reverse mortgage refinancing phenomenon. The $1.5 billion in payoffs in March represents a 27% annual payoff rate.

While 2021 easily surpassed previous annual issuance records with $13.2 billion of total HMBS issuance, 2021’s record may fall: over $4 billion was issued in the first quarter of 2022.

Our friends at Recursion broke down the prepayment numbers further: last month’s 98% MCA mandatory purchases totaled just $254 million, a record low 17% of the total.

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

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