HMBS Marches On – March 2022

HECM Mortgage-Backed Securities (“HMBS”) issuers continued their record pace in March 2022, again issuing nearly $1.4 billion in new HMBS, again almost setting a record for new original loan pools for the sixth month in row. Refinancing activity remains strong.

HMBS issuance totaled $13.2 billion for 2021, 22% more than the previous record set in 2010. With three months in the books, HMBS issuance is on pace to set a another new record in 2022.

For the past several months, original (first participation) production has been remarkably consistent. March’s production of original new loan pools totaled $1.13 billion, just above February’s $1.12 billion and consistent with January’s record $1.18 billion, December’s $1.14 billion, November’s $1.08 billion and October’s $1.07 billion. Approximately $671 million in original new loan pools were issued a year ago, in March 2021.

109 pools were issued in March: 54 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 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 $225 million, within the typical range.

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

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