Top Issuers of Reverse Mortgage Securities in 2014 Ranked

As predicted, Home Equity Conversion Mortgage (HECM) mortgage-backed securities (HMBS) ended 2014 at a record low not seen since 2008, but the total number of pools issued during the year were a different story altogether, says new commentary from New View Advisors, which also ranks the top issuers of the year.

HMBS issuers sold $6.6 billion in new pools over the course of 2014, closing out the year 31% lower from 2013’s grand total. It was also the lowest full year of issuance since 2008, when HMBS was a fledgling program that had yet to be adopted by most market participants, says New View’s commentary of publicly available Ginnie Mae issuance data.

But while HMBS issuance fell short of last year’s numbers, an all-time record of 1,026 pools were issued in 2014—just three more pools than the previous record set a year ago. 

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Tail issuance accounted for 24% of 2014’s issuance, up from its 15% market share last year. 

“This was a bright spot for HMBS issuers as the securitization of additional amounts or ‘tails’ continued to grow,” says New View Advisors. “We expect this trend to continue in 2015.”

Drilling down on a monthly basis, December’s $649 million in HMBS issuance was the third-highest in 2014, during which 91 pools were issued consisting of 50 original issuances and 41 tail pools. 

This was still considerably lower when compared to a year ago, when HMBS issuance totaled $826 million and averaged nearly $800 million per month during 2013. This year, the average was only $552 million per month, according to New View. 

As for the top HMBS issuers of the year, Reverse Mortgage Solutions led all issuers with 144 total pools comprising $1.48 billion, followed by Urban Financial of America with 200 pools totaling $1.19 billion and American Advisors Group coming in third with 116 pools and $1.17 billion, respectively.

Other top issuers for the year included Liberty Home Equity Solutions with 91 pools at approximately $783 million; Live Well Financial with 83 pools and $470.4 million; and Nationstar Mortgage with 172 total pools tallying $452.7 million.

Overall, Ginnie Mae issuance—including both forward and reverse Ginnie Mae I and II securities—is down significantly year-over-year. In 2014, $285 billion was issued through November compared to just over $417 billion last year.

View the commentary from New View Advisors.

Written by Jason Oliva