HECM Mortgage-Backed Securities (“HMBS”) issuance in December totaled $575 million, $8 million lower than November’s $583 million. 75 pools were issued in December, four more than November. For the full year, HMBS issuance volume totaled $6.01 billion – $439 million lower than 2023 and $7.9 billion lower than 2022’s record $14 billion issuance tally. 2024 was the lowest HMBS issuance year since the program’s infancy in 2008. Subtracting tail issuance, 2024 HMBS new origination volume totaled just $3.95 billion.
FAR was the top issuer again in December with $184 million, an increase of $28 million over November’s $156 million. Issuance from Longbridge decreased $10 million to $139 million, Mutual of Omaha issuance decreased $4 million to $106 million, and PHH issued $96 million, a $2 million decrease from last month. Ginnie Mae/RMF (aka “Issuer 42”) again issued no HMBS pools.
December’s original (first participation) production of $389 million was $23 million lower than November’s $412 million and $44 million higher than October’s $345 million.
Ginnie Mae circulated on November 25th the Final Term Sheet for its “HMBS 2.0” program, whereby certain non-active loans that have UPBs in excess of 98% of Maximum Claim Amount can be pooled. Once implemented, HMBS 2.0 will increase HMBS issuance substantially by financing most mandatory buyouts, which have averaged $431 million per month for the last 12 months, according to Recursion. There is no timeline yet for the program’s launch.
The 75 pools issued in December consisted of 22 first-participation or original pools, 52 tail pools, and one pool consisting of both original and tail participations. 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. Last month’s tail pool issuance totaled $185 million compared to November’s $170 million.
Notable in the December HMBS issuance data are 19 pools with aggregate pool size less than $1 million. Issuers are taking advantage of Ginnie Mae’s provision to issue pools as small as $250,000. This represents $11.6 million of UPB that may not otherwise have been issued in December. In addition, Ginnie Mae issued APM 23-11 in November 2023 which allows participations from the same loan to be pooled more than once in the same month. The aggregate of participations pooled in December for which more than one participation from the same loan was pooled is $62.6 million, of which $2.1 million were first participations.
New View Advisors compiled this data from publicly available Ginnie Mae data as well as private sources.
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