Fannie Mae Reverse Mortgage Portfolio Grows, Market Share Shrinks

imageThe reverse mortgage portfolio of  Fannie Mae grew from $41.6 billion as of December 31, 2008 to $49.8 billion as of September 30, 2009 according to its 3Q SEC filing.

The GSE estimates its market share of the total market of reverse mortgage loans outstanding was approximately 90% as of December 31, 2008. 

According to the filing, changes in pricing strategy and market conditions have lead its market share of HECM acquisitions to fall to 20% during the 3Q and to 10% in September 2009.  Ginnie Mae has picked up the slack for FNMA, issuing $5.1 billion of HMBS in FY 2009.

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FNMA posted a net loss of $19.8bn, or $3.47 per share, in Q309, compared with a net loss of $15.2bn in Q209. 

 

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  • With no other data to observe, the preliminary conclusion has to be that the 10% acquisition estimate reflects the change in dominant products from the Monthly Adjusting to Fixed. What will happen if Monthly Adjusting starts providing more proceeds than Fixed in the future? Will Fannie Mae be able to acquire the increase?

    At least for now product mix has made the secondary market buyer for Adjusting Rates less problematic. While we have the time, something needs to be done to ensure a significant buyer for adjusting rate products in the secondary market in the future.

  • With no other data to observe, the preliminary conclusion has to be that the 10% acquisition estimate reflects the change in dominant products from the Monthly Adjusting to Fixed. What will happen if Monthly Adjusting starts providing more proceeds than Fixed in the future? Will Fannie Mae be able to acquire the increase?rnrnAt least for now product mix has made the secondary market buyer for Adjusting Rates less problematic. While we have the time, something needs to be done to ensure a significant buyer for adjusting rate products in the secondary market in the future.

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