NewView Advisors, LLC, a financial services firm based in New York, has released a new look at the state of HECM mortgage-backed securities for 2017. HECM is the Federal Housing Administration’s (FHA) Home Equity Conversion Mortgage reverse mortgage program, which allows homeowners to withdraw some of the equity in their home. These HECM loans can also be pooled into HECM mortgage-backed securities (HMBS) within the Ginnie Mae II MBS program.
The total HMBS issuance volume for 2017 was $10.5 billion, falling just short of the 2010 record $10.7 billion. According to NewView, HMBS issuance was particularly strong in the back half of 2017, with nearly a third of the HMBS issued during the year falling during Q4 2017. That amounted to nearly $3.3 billion of HMBS, with nearly $1.35 billion issued in December alone. Fixed-rate HMBS accounted for 8.5 percent of the 2017 totals.
NewView also compiled a list ranking the top issuers of HMBS for 2017. American Advisors Group took the top spot with over $2.3 billion in securities issued in 2017. That gave AAG an impressive 21.9 percent market share for the year.
Rounding out the top five are Reverse Mortgage Funding ($2 billion in 2017 issuance), Finance of America Reverse ($1.8 billion), Ocwen Loan Servicing ($1.2 billion), and Live Well Financial ($945 million). You can see the rest of NewView’s top HMBS issuer rankings below. NewView compiled its rankings based on a both publically available Ginnie Mae data and private sources.
“Despite the month-to-month fluctuations in HECM endorsements, HMBS issuance remains robust, aided by growth in tail issuance and, in the fourth quarter, some issuance of highly seasoned pools,” said NewView’s report. “While endorsement count is an ok proxy for new origination volume, it does not provide a comprehensive picture of overall industry growth or health.”