New tails and old loans have helped HECM mortgage-backed securities (HMBS) bounce back since April’s meager $396 million issuance tally. Still, issuers only created $582 million in new HMBS pools during May 2014, the sixth smallest issuance since May 2009, according to the latest monthly commentary from New View Advisors’.
In comparison, HMBS issuance totaled $845 million in May 2013, and averaged nearly $800 million per month in 2013. This year, issuance is only averaging $539 million per month, New View reports.
About $60 million of seasoned HECM loans were securitized for the first time in May and Tail Issuances accounted for about $140 million, up $19 million from April.
The downturn in HMBS issuance mirrors loan production, New View notes, with recent program changes including a cut to principal limits as well as new draw restrictions for borrowers that were implemented in late 2013.
Overall, Ginnie Mae issuance is down significantly, with only $23.2 billion issued in April 2014, compared to an average of $38 billion per month in 2013, New View writes, noting the Ginnie Mae figures represent both forward and reverse loans. Totals reflect a decline in mortgage originations, especially refinancings, the commentary says.
Access the New View Advisors commentary and data.
Written by Emily Study