Archive for the ‘HMBS’ Category

HMBS March 2017: Honey We Shrunk the Float, Part II

Thursday, April 13th, 2017

The HMBS market shrank again in March for the second time in the last 4 months, with record prepayment numbers exceeding new issuance and negative amortization. Issuers created 103 pools in March totaling nearly $727 million. HMBS production remained steady as it has for the last several months, with an occasional bump from highly seasoned pools. March issuance divided into 44 original pools and 59 tail pools. No seasoned original pools were issued. Production of original new loan pools was $508 million, down from February’s $512 million.

Original pools are those HMBS pools backed first participations in previously uncertificated HECM loans. Tail HMBS issuances are HMBS pools consisting of subsequent participations. In other words, tail pools are created from the Uncertificated Portions of HECMs that have already had their original HMBS issuance. March’s tail issuance was about $219 million, consistent with tail production the past 12 months.

In December 2016, the HMBS market shrank for the first time as prepayments drove total outstanding HMBS to just under $55 billion. Last month, total outstanding HMBS shrank by about $62 million from February, driven by last month’s record payoffs. We estimate that last month’s change in HMBS balance was composed of approximately $177 million in negative amortization (a record), plus the $727 million in new issuance, minus $966 million in payoffs. Payoffs have exceeded new issuance for seven months in a row.

Payoffs figure continue to climb as more seasoned HECM loans liquidate or reach 98% of their Maximum Claim Amount (“MCA”). Our friends at Recursion Co once again crunched the numbers: the payoffs from 98% MCA assignments totaled a record $550 million last month. This amount has been rising steadily. According to Recursion, the 98% MCA puts were only $92 million, or 29.8% of payoffs in September 2013. This could mean further shrinkage in HMBS float throughout 2017.

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

HMBS February 2017: After January Delirium, February Equilibrium

Monday, March 13th, 2017

The HMBS market returned to equilibrium in February, with both new issuance and outstanding float matching previous levels. Issuers created 97 pools in February totaling nearly $713 million. HMBS production was very similar to November and December 2016, but down significantly from January’s $868 million, which included large seasoned pools. The February pools divided into 48 original pools and a record 49 tail pools. No seasoned pools were issued. Production of original new loan pools was $513 million, down from January’s $525 million.

Original pools are those HMBS pools backed by the first participation in a previously uncertificated HECM loan. Tail HMBS issuances are HMBS pools consisting of subsequent participations. In other words, tail pools are created from the Uncertificated Portions of HECMs that have already had their original HMBS issuance. February’s tail issuance was about $200 million, in line with normal tail production in the past 12 months.

In December 2016, the HMBS market shrank for first time as record prepayments drove total outstanding HMBS to just under $55 billion. Last month however, total outstanding HMBS rose by about $45 million from January, driven by steady issuance, and a drop off from the record payoffs of December 2016. We estimate that last month’s change in HMBS balance was composed of approximately $176 million in negative amortization (a record), plus the $713 million in new issuance, minus $843 million in payoffs. Payoffs have exceeded new issuance for six months in a row.

Payoffs figure continue to climb as more seasoned HECM loans liquidate or reach 98% of their Maximum Claim Amount (“MCA”). Our friends at Recursion Co once again crunched the numbers: the 98% MCA assignments accounted for a record 65% of the dollar amount of payoffs last month. This percentage has been rising steadily. According to Recursion, the 98% MCA puts were only 29.8% of payoffs in September 2013. This could mean further shrinkage in HMBS float throughout 2017.

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

Winter’s Tail: Strong HMBS Issuance Ushers in New Year

Sunday, February 12th, 2017

HMBS issuers began 2017 with a strong month, creating 121 pools in January totaling nearly $869 million. Production of original new loan pools was $525 million, up from December’s $515 million and much higher than January 2016’s total of $469 million. The pools divided into 57 original pools and a record 64 tail pools. The strong issuance was helped by a few large seasoned tail pools from legacy (i.e. non-originator) issuers.

Original pools are those HMBS pools backed by the first participation in a previously uncertificated HECM loan. Tail HMBS issuances are HMBS pools consisting of subsequent participations. In other words, tail pools are created from the Uncertificated Portions of HECMs that have already had their original HMBS issuance. January’s tail issuance was about $344 million, the 3rd highest dollar total ever.

In December 2016, the HMBS market shrank for the first time as record prepayments drove total outstanding HMBS to just under $55 billion. Last month however, total outstanding HMBS rose by about $174 million from December, driven by the large tail issuance and a drop off from the record payoffs of December 2016. We estimate that last month’s change in the outstanding HMBS float was composed of approximately $175 million in negative amortization, plus the $869 million in new issuance, minus $870 million in payoffs. Payoffs have exceeded new issuance for five months in a row.

Payoffs figure continue to climb as more seasoned HECM loans liquidate or reach 98% of their Maximum Claim Amount (“MCA”). Our friends at Recursion Co crunched the numbers: the 98% MCA assignments accounted for a record 62.4% of the dollar amount of payoffs last month. This percentage has been rising steadily. According to Recursion, the 98% MCA puts were only 29.8% of payoffs in September 2013. This could mean further shrinkage in HMBS float throughout 2017.

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

Honey, We Shrank the Float: HMBS Supply Drops for First Time

Saturday, January 14th, 2017

The HMBS market shrank for the first time as record prepayments drove total outstanding HMBS to just under $55 billion. HMBS issuers created 97 pools in December 2016, totaling $715 million. Production of original new loan pools was $515 million, up from November’s $504 million and about the same as December 2015’s totals. The pools divided into 49 original pools and 48 tail pools. There were no seasoned pools issued.

Original pools are those HMBS pools backed by the first participation in a previously uncertificated HECM loan. Tail HMBS issuances are HMBS pools consisting of subsequent participations. In other words, tail pools are created from the Uncertificated Portions of HECMs that have already had their original HMBS issuance. December’s tail issuance was about $199 million, the 3rd lowest monthly total in 2016.

Total outstanding HMBS fell by about $55 million from November and is now $11 million below October’s month-end tally. We estimate that December’s change in HMBS balance was composed of approximately $173 million in negative amortization, plus the $715 million in new issuance, minus a whopping record $943 million in payoffs. By comparison, December 2015 payoffs totaled only about $653 million. Payoffs have exceeded new issuance for four months in a row. Payoffs figure continue to climb as more seasoned HECM loans liquidate or reach 98% of their Maximum Claim Amount. Further shrinkage in outstanding HMBS float could continue throughout 2017.

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

HMBS Issuer Rankings Full Year 2016 – RMF Maintains Razor Thin Margin for the Crown

Wednesday, January 4th, 2017

RMF remains the #1 HMBS Issuer for 2016, issuing $2.001 billion of securities for a 21.8% market share, just $9.45 million more than AAG’s $1.991 billion and 21.7% market share. Finance of America Reverse, Ocwen Loan Servicing, and RMS round out the top five issuers. Finance of America Reverse issued $1.475 billion for a 16.1% market share, Ocwen was fourth with $1.087 billion and an 11.8% market share, and RMS was fifth with $868.0 million issued for a 9.5% market share. Live Well Financial slipped a notch to 6th for calendar 2016. The top five issuers accounted for 80.8% of all issuance, up slightly from last quarter’s 80.6%. There were no new HMBS issuers in the fourth quarter of 2016.

Despite the much-reported slowdown in HECM endorsements, HMBS issuance remains robust, aided by growth in tail issuance and highly seasoned pools. Issuance volume totaled $9.187 billion for 2016, just 3% less than 2015’s $9.453 billion. 2010 was the record year for HMBS with $10.7 billion of securities issued.

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

hmbs-2016q4

HMBS November 2016: Give Thanks for Tail Issuance

Friday, December 16th, 2016

HMBS issuers created 108 pools in November, down from October due to the lack of seasoned pool issuance. Production of original new loan pools was $504 million, up from October’s $487 million and generally in line with previous months this year. Issuance totaled approximately $718 million in November, the 4th lowest monthly dollar volume this year, down from October’s total of $832 million. The pools divided into 53 original pools and 55 tail pools.

Original pools are those HMBS pools backed by the first participation in a previously uncertificated HECM loan. Tail HMBS issuances are HMBS pools consisting of subsequent participations. In other words, tail pools are created from the Uncertificated Portions of HECMs that have already had their original HMBS issuance. October’s tail issuance was about $214 million, the third highest monthly total this year.

Total outstanding HMBS ticked up to just over $55 billion, an increase of only $44 million from October. We estimate that November HMBS was composed of approximately $171 million in negative amortization, plus the $718 million in new issuance, minus about $845 million in payoffs. Payoffs have exceeded new issuance in 5 of the last 6 months. Payoffs figure continue to climb as more seasoned HECM loans liquidate or reach 98% of their Maximum Claim Amount.

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

HMBS Issuer Rankings 2016Q3 – RMF Squeaks Past AAG to Capture the Crown

Friday, October 21st, 2016

RMF has overtaken AAG as #1 HMBS issuer for the first nine months of 2016, issuing $1.519 billion of securities for a 22% market share, just $12 million more than AAG’s $1.507 billion and 21.8% market share. AAG had been the leading HMBS issuer since 2015Q2. RMF first issued HMBS in 2014Q1. Finance of America Reverse, Liberty Home Equity, now issuing HMBS as Ocwen Loan Servicing, and Live Well Financial round out the top five issuers. The Money House is the newest HMBS entrant, bringing the total number of issuers to a record 15. Finance of America Reverse issued $1.086 billion for a 15.7% market share, Liberty was fourth with $815.8 million and an 11.8% market share, and Live Well was fifth with $648.4 million issued for a 9.4% market share. The top five issuers accounted for 80.6% of all issuance, down slightly from last quarter’s 81.8%.

Despite the much-reported slowdown in HECM endorsements, HMBS issuance remains robust, aided by growth in tail issuance and highly seasoned pools. As earlier reported, September new original HMBS issuance was up 34% over August. Continued strength in home price appreciation and capital markets execution also help the industry maintain volume in the face of increased mortgage lending scrutiny and regulatory oversight, and ongoing HECM program changes such as financial assessment. Issuance volume totaled $6.922 billion for the first nine months of 2016, $179 million more than 2015Q3’s $6.743 billion. 2010 was the record year for HMBS with $10.7 billion of securities issued.

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

hmbs-2016q3

HMBS September 2016: Fall Harvest is Bumper Crop of New Collateral and Record Number of Pools

Wednesday, October 19th, 2016

HMBS issuers created a record number 119 pools in September, this time driven by new HECM loans, not seasoned collateral or tail issuance of new balances from old loans. Production of original new loan pools increased to an impressive $623 million, up from $467 million in August. Issuance totaled approximately $836 million in September, the third highest monthly dollar volume this year. September’s HMBS issuance total decreased 16% from August’s $996 million, but August’s high totals were augmented by $321 million of new pools backed by very seasoned loans. New original and unseasoned pool production rose 34% from August 2016, and total issuance was up 23% from September 2015’s $680 million. The record pools tally divided into 63 original pools and 56 tail pools.

Original pools are those HMBS pools backed by the first participation in a previously uncertificated HECM loan, typically a recently originated HECM loan.   The original pool totals for September are a breakout from the typical post-Financial Assessment range of $400 – $500 million per month. September’s tail issuance was typical for HMBS tail issuance in 2016. No original pools backed by highly seasoned HECM loans were issued in September.

Tail HMBS issuances are HMBS pools created from the Uncertificated Portions of HECMs that have already had their original HMBS issuance. Tail Issuance strengthened to about $212 million, typical of this year’s production.

Total outstanding HMBS ticked up to $54.9 billion, up about $157 million from August. We estimate that September HMBS was composed of approximately $170 million in negative amortization, plus the $836 million in new issuance, minus a record $850 million in payoffs. Payoffs figure continue to climb as more seasoned HECM loans liquidate or reach 98% of their Maximum Claim Amount.

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

Summer BBQ With Seasoning: August HMBS Issuance Soars With Old Collateral

Thursday, September 22nd, 2016

HMBS issuers created approximately $996 million in new HMBS pools during August 2016, the highest total this year, but with original issuance totals typical of the post-Financial Assessment HECM origination market. Last month’s HMBS issuance total increased 41% from July’s $704 million, and 36% from August 2015’s $730 million. Issuers sold 96 pools in August 2016, divided into 50 original pools and 46 tail pools. Original pools are those HMBS pools backed by the first participation in a previously uncertificated HECM loan, typically a recently originated HECM loan. Production of original new loan pools decreased to $467 million from $497 million in July. However, $321 million of original pools backed by highly seasoned HECM loans were issued, resulting in the highest monthly HMBS issuance total so far this year. The largest pool was backed by HECM loans averaging over ten years old.

Total outstanding HMBS ticked up to $54.7 billion, up $325 million from July. We estimate that August HMBS was composed of approximately $169 million in negative amortization, plus the $996 million in new issuance, minus a record $839 million in payoffs. Payoffs figure to climb still higher as more seasoned HECM loans liquidate or reach 98% of their Maximum Claim Amount.

Original HMBS pools are created when a pool of FHA-insured Home Equity Conversion Mortgages (“HECMs”) is securitized for the first time. Tail HMBS issuances are HMBS pools created from the Uncertificated Portions of HECMs that have already had their original HMBS issuance. Tail Issuance strengthened to about $209 million, typical of this year’s production. This appears to be the new issuance range for the industry: new production between $400 – $500 million per month, tail issuance of just above $200 million per month, plus the occasional seasoned loan HMBS securitization.

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

Hold the Fireworks: Flat Issuance and Supply Mark July HMBS

Sunday, August 14th, 2016

HMBS issuers created approximately $704 million in new HMBS pools during July 2016, with issuance totals typical of the post-Financial Assessment HECM origination market. Last month’s HMBS issuance total increased slightly from June’s $694 million total but fell well short of July 2015’s $809 million. Issuers sold 101 pools in July 2016, divided into 49 original pools and 52 tail pools. Original pools are those HMBS pools backed by the first participation in a previously uncertificated HECM loan, typically a recently originated HECM loan. Production of original new loan pools increased to $497 million. No seasoned original pools were issued.

Total outstanding HMBS ticked up to $54.4 billion, up only $77 million from June, the smallest increase in recent years. We estimate that July HMBS was composed of approximately $169 million in negative amortization, plus the $704 million in new issuance, minus a hefty $798 million in payoffs. Payoffs figure to climb still higher as more seasoned HECM loans liquidate or reach their 98% of Maximum Claim Amount threshold.

Original HMBS pools are created when a pool of FHA-insured Home Equity Conversion Mortgages (“HECMs”) is securitized for the first time. Tail HMBS issuances are HMBS pools created from the Uncertificated Portions of HECMs that have already had their original HMBS issuance. Tail Issuance strengthened to about $207 million, typical of this year’s production. This appears to be the new issuance range for the industry: New production between $400 – $500 million per month, tail issuance of just above $200 million per month, plus the occasional seasoned loan HMBS securitization.

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