Reverse Mortgage Securities Total $7.1 Billion in 2013 to Date

Issuance of reverse mortgage securities totaled $7.1 billion for the first three quarters of 2013, with 757 pools issued, according to data compiled by New View Advisors.

For the first nine months of 2013, there are now 11 active issuers of reverse mortgage securities, New View notes, with American Advisors Group (AAG) as the newest entrant.

Issuing 14 pools for nearly $288 million, AAG represents 4.05% of total reverse mortgage securities issuance and is currently No. 6 for dollar volume in the nine-month rankings compiled by New View. 

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RMS continues to reign as the No. 1 issuer, with a total of 179 pools for $2.3 billion issued year to date. The company issued 57 pools for $589.7 million in the third quarter, extending its lead over No. 2 issuer Urban Financial, which sold 44 pools for $495.2 million in the third quarter. 

As of the third quarter of 2013, RMS accounts for 32.74% of all issuance and Urban represents 25.53%, respectively. 

Live Well Financial, Generation Mortgage and Nationstar retained their positions as number three, four and five issuers, respectively, representing 13.80%, 9.64% and 6.23%.

While the number of reverse mortgage securities pools issued in the third quarter was nearly identical to the previous quarter, 257 compared to 256, dollar volume declined 13% to $2.2 billion. 

This reflects lower origination volume, but increase of smaller “tail” issuance occurring as servicing, borrower draws and MIP, continue to accrete on outstanding Home Equity Conversion Mortgages (HECMs), notes New View. 

“Despite the downward origination trend, ongoing tail issuance, negative amortization and existing new issuance continues to outweigh payoffs,” said Michael McCully, partner with New View. “This is increasing the overall outstanding amount of HMBS, which has a positive impact on liquidity in the sector.”

Of the third quarter issuance, $950 million, or 43%, was fixed rate. Year to date, fixed rate reverse mortgage securities represent approximately 60%, or $4.2 billion, of total issuance.

In the first half of 2013, the figure was $3.3 billion, representing 67% of total issuance.

Written by Jason Oliva

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