Archive for the ‘Uncategorized’ Category

HMBS October 2016: No October Surprise

Thursday, November 17th, 2016

HMBS issuers created 100 pools in October, keeping pace with September and again aided by seasoned pool issuance. Production of original new loan pools fell to $487 million, down sharply from September’s $624 million but in line with the $467 million issued in August. Issuance totaled approximately $832 million in October, the fourth highest monthly dollar volume this year, down just slightly from the September’s $836 million tally. The pool tally divided into 47 original pools and 53 tail pools. October’s HMBS issuance included two highly seasoned original pools totaling $136 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. October’s tail issuance was about $209 million, typical of this year’s production.

Total outstanding HMBS ticked up to just under $55 billion, up about $111 million from September. We estimate that October HMBS was composed of approximately $171 million in negative amortization, plus the $832 million in new issuance, minus a record $891 million in payoffs. Payoffs have exceeded new issuance in 4 of the last 5 months. Payoffs 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.

Blast from the Past lifts HMBS Issuance to 18-Month High

Monday, June 15th, 2015

HMBS issuers created $874 million in new HMBS pools during May 2015, the largest HMBS issuance since November 2013, up from $798 million in April, and substantially higher than May 2014’s $582 million. 105 pools were issued, consisting of 62 original issuances and 43 tail pools. May’s higher totals were driven by Reverse Mortgage Funding, LLC’s issuance of 3 new pools backed by highly seasoned CMT loans totaling $121 million. Thus far in 2015, HMBS issuance is averaging just over $736 million per month, well above 2014’s $550 million monthly average.

As we noted last month, FHA’s new Financial Assessment requirements for newly originated HECM loans will certainly reduce new loan supply, at least in the short run. Given the lag between loan origination and securitization, it will take a few months before we know the full impact.

Total outstanding HMBS is about $51.4 billion, up from $50.9 billion at the end of April. We estimate this increase is composed of approximately $160 million in negative amortization, plus the $874 million in new issuance, minus about $625 million in payoffs. If monthly issuance falls back below $500 million, total HMBS outstanding could shrink for the first time.

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 Issuances accounted for about $150 million, about 17% of May’s total. Newly originated loans comprise a large majority of HMBS issuance in any given month. As a result, HMBS issuance is a good barometer of recent HECM production.

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

HMBS Issuance Strong in April 2015 But Challenges Loom

Sunday, May 17th, 2015

HMBS issuers created $798 million in new HMBS pools during April 2015, the largest HMBS issuance since December 2013, up from $660 million in March, and substantially higher than April 2014’s paltry $396 million. 113 pools were issued, consisting of 63 original issuances and 50 tail pools. Thus far in 2015, HMBS issuance is averaging just over $700 million per month, well above 2014’s $550 million monthly average.

However, new regulations may prevent HMBS issuers from maintaining this healthy clip. FHA’s Financial Assessment requirements for newly originated HECM loans will certainly reduce loan volume for the foreseeable future. Given the lag between loan origination and securitization, it will take a few months before we know the full impact.

Total outstanding HMBS is $50.9 billion, up from $50.7 billion at the end of March. We estimate that this increase is composed of $159 million in negative amortization, plus the $798 million in new issuance, minus about $650 million in payoffs. If monthly issuance falls back below $500 million, total HMBS outstanding could shrink for the first time.

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 Issuances accounted for $155 million, about 19% of April’s total. Newly originated loans comprise a large majority of HMBS issuance in any given month. As a result, HMBS issuance is a good barometer of recent HECM production.

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

HMBS Starts Off Strong in 2015

Thursday, February 19th, 2015

HMBS issuers sold $712 million in new pools during January 2015, the highest total since December 2013. Issuance climbed nearly 10% from December 2014 and slightly exceeded the $711 million total of January 2014. This marks the fourth straight month that issuance has exceeded $600 million. With interest rates still low and financial assessment postponed, we expect this trend to continue.

Tail issuance accounted for over 23% of January’s total dollar amount, and half of the 106 pools issued.

Issuers are benefitting from both the higher PLFs enacted in August 2014 and relatively large borrower draws, as loans originated with utilization caps reach their 13th month, when draw restrictions expire.

Fixed rate issuance comprised only 25% of total HMBS issuance in January 2015, reflecting the typical product mix brought on by FHA’s program changes.

Newly originated loans comprise a large majority of HMBS issuance in any given month, and a very large majority of current production HECM loans are securitized into HMBS. As a result, HMBS issuance is a good barometer of recent HECM production.

Overall Ginnie Mae issuance is down significantly, with $313 billion issued in 2014, compared to just over $417 billion in 2013. (These figures include both forward and reverse, Ginnie Mae I and Ginnie Mae II securities.)

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

HREMIC 2014 First Half Issuance

Monday, June 30th, 2014

HREMIC issuance for the first half of 2014 was $2.37 billion, with 12 transactions underwritten by 4 different sponsors.  Bank of America Merrill Lynch continues its reign as market leader with a 43% market share, issuing a little over $1 billion of HREMICs.  RBS was second with 3 issuances totaling $741.7 million, and Stifel was third with 3 transactions for $472.4 million.  Nomura rounded out the pack with one transaction for $138.4 million.

First half issuance is roughly on pace with 2013 volume.  For all of 2013, 6 underwriters sponsored 26 transactions for $4.9 billion.  The record was 2012, when 31 transactions were issued for slightly more than $6 billion.

HREMIC collateral consists of HMBS, which are Ginnie Mae guaranteed pass-through securities.  HMBS are backed by pools of participations of HECMs, which are FHA-insured reverse mortgages.  This double layer of government guarantee, combined with the relatively high coupon and favorable prepayment patterns of the underlying loans, results in very favorable execution, even when compared to other Ginnie Mae “forward mortgage” securities.

New View Advisors compiled these rankings from publicly available Ginnie Mae data.

 

HMBS Issuer 2014Q1 League Tables – How Long Will RMS Stay On Top?

Wednesday, April 9th, 2014

Once again, RMS led all HMBS Issuers in the first quarter of 2014 with $414.7 million of securities for a 24% market share.  RMS has been the consistent leader of HMBS issuance the last three years.  Urban Financial, AAG, Liberty, and Generation rounded out the top 5 with $353.7 million, $275.0 million, $226.6 million, and $123.7 million respectively.  There were 13 different issuers, with new entrant RMF contributing $8.5 million of HMBS this quarter.  Despite lower volume, this is the highest number of issuers for a given quarter since the program began in 2007.  Of the total $1.7 billion of issuance, 23% or just under $400 million were tail issuances, 111 of the 248 pools issued.

Fixed rate HMBS totaled $439 million for the quarter, 26% of total issuance.  Along with the fourth quarter of 2013, this is the lowest percentage of fixed rate HMBS issued in a quarter since the early days of Ginnie Mae’s HMBS program.  By comparison, 47% of total production was fixed rate for all of 2013, and 65% of total production was fixed rate in 2012.  Of the $1.27 billion of adjustable rate HMBS, just $14.6 million was CMT based, the rest being LIBOR indexed HMBS.

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

Ed Gainor

Monday, August 1st, 2011

All of us at New View Advisors join our friends at Bingham McCutchen and the entire securitization community in mourning the loss of Ed Gainor, who passed away on July 22nd. Ed was a securities lawyer par excellence, and he was instrumental in the birth of the reverse mortgage capital markets. Ed was a teacher and mentor to many securitization lawyers who, we have no doubt, will carry the torch for reverse mortgages and securitization.

Ed did not flinch when asked to lead the legal team for the first reverse mortgage securitization in 1999. It was a daunting task. The legal hurdles seemed as insurmountable as the financial puzzle: the form the trust would take, how it would accommodate borrower draws, and how it could accommodate a unique FASIT tax vehicle. These were all unanswered questions that Ed, along with his partners and his team, tackled one by one. I remember well Ed’s enthusiasm on the closing day: “Let’s close the first reverse mortgage securitization right now!”

This was just one of Ed’s many accomplishments. He was the rare professional who could execute transactions, solve problems, but also take a step back and say: “Where do we go from here?” He was a leader in preparing the securitization industry for its next phase. I hope we do right by him. Ed Gainor was a most excellent lawyer, raconteur, and good friend. R.I.P.