AAG Surpasses RMS As Top Producing HMBS Issuer

After just two years following its initial approval to issue home equity conversion mortgage-backed security (HMBS), American Advisors Group has taken the top spot for issuer volume, surpassing industry mainstay Reverse Mortgage Solutions.

AAG began as a retail reverse mortgage operation, later added a wholesale channel and quickly grew its market share to become the top producer of reverse mortgages by volume from its Irvine, Calif.-based headquarters and call center and nationwide reach via additional origination channels.

AAG issued $907.3 million of securities in the first half of 2015 for a 20.1% market share, while RMS issued $855.2 million—a 10% increase over the company’s first half 2014 $774 million, tallying 18.9% market share, according to the latest Ginnie Mae data compiled by New View Advisors. The company says its top position reflects sustained growth.

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“We’re very proud to claim the top position as the leading HMBS issuer in the first half of 2015—just two years since we started issuing Ginnie Mae securities,” said Matt Engel, AAG chief financial officer. “Achievement of this ranking reflects the significant growth we’ve experienced in both our retail and wholesale origination platforms, as well as the build-up of our retained servicing portfolio.”

Until now, Reverse Mortgage Solutions has remained the industry leader for the past five years. AAG launched its HMBS program two years ago this month, and began noticeably gaining traction in the HMBS market in the first nine months of 2014.

Another relative newcomer, Cherry Creek Mortgage Company, Inc., is also making a name for itself on the HMBS issuer list, taking the 11th spot by volume after its first month of issuance. Cherry Creek issued nearly $8 million of securities for a 0.2% of the market share.

1st Reverse Mortgage USA, a division of Cherry Creek, announced last March it had gained Ginnie Mae approval to issue HMBS, but hadn’t acted upon that approval until June of this year, the company confirmed with RMD.

“As the newest issuer, our strategic plan is to build a balanced servicing portfolio moving forward,” said Dan Harder, vice president of 1st Reverse Mortgage USA.

Rounding out the Top-5 issuers are Urban Financial of America, Reverse Mortgage Funding, and Liberty Home Equity Solutions, at $834.6 million, $672.3 million, and $532.9 million respectively.

“The Top-5 issuers accounted for more than 84% of all issuance in the half, the most since late 2012 when the Top-5 accounted for 91% of all issuance,” said New View in its commentary.

HMBS Issuers in the first half of 2015 sold $4.5 billion, a 44% increase over the $3.1 billion issued in the first half of 2014, data show.

“New issuance was up 52%, tail issuance was up 23%, and new issue, seasoned pools increased twelve-fold as whole loan HECM buyers capitulated to HMBS’ superior execution,” New View said.

New View Advisors also attributed the “dramatic volume increase” to last year’s Federal Housing Administration Principal Limit Factor increase and a pre-financial assessment origination surge this spring.

Read New View Advisors’ commentary here.

Written by Cassandra Dowell