Investor Market for Reverse Mortgage HREMICs Keeps Record Pace

In the investor market for reverse mortgages, the pace of HREMICs—or the real estate mortgage investment conduits comprising reverse mortgage securities—is continuing at record according to the latest Ginnie Mae data compiled by New View Advisors.

First quarter HREMIC issuance matched last year’s record pace, New View writes in its most recent market commentary, with 8 HREMICs totaling $1.6 billion.

The HREMIC first rolled out in 2008, allowing for inclusion of HECM backed mortgage securities.

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Since the first HREMIC was issued in 2009, there have been 91 transactions in total, amounting to more than $16.4 billion, according to New View’s analysis.

Bank of America Merrill Lynch leads HREMIC activity, including participation as the top underwriter/sponsor in the first quarter of 2013 with three offerings totaling $660 million, followed by Knight Capital, with three offerings totaling $570 million during the quarter.

“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 writes.

View the full New View commentary.

Written by Elizabeth Ecker