Nationstar Plans $300 Million Reverse Mortgage Securitization

This week, Moody’s Investors Service assigned provisional ratings to three classes of residential mortgage-backed securities issued by Nationstar HECM Loan Trust 2016-01.

The certificates are backed by one pool of inactive Home Equity Conversion Mortgage (HECM) first-lien loans, along with real estate owned (REO) properties acquired through the conversion of ownership of reverse mortgages covered by Federal Housing Administration insurance.

In total, the collateral pool comprises 1,085 mortgages with a balance of $302,891,615, according to Moody’s. Broken down by asset type, the pool includes 884 HECM loans with an aggregate balance of approximately $258.7 million, and 201 REO properties with a balance of $44.2 million.

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The status of the loans are either in default (10.1% of total pool), due and payable (12.3%), foreclosure (63%) or REO (14.6%).

Of those in default, 8.5% are due to non-occupancy, while 88.3% are due to taxes and insurance default and 3.2% are in default for other reasons.

The portion of REO loans were acquired through foreclosure or deed-in-lieu of foreclose on the associated loan.

Nationstar acquired the mortgage assets from Ginnie Mae sponsored HECM mortgage-backed (HMBS) securitizations. All of the loans are covered by FHA insurance for the repayment of principal up to certain amounts.

Nationstar Mortgage, LLC, is the servicer for the deal. The transaction is¬†Nationstar’s fourth non-agency MBS backed by inactive reverse mortgages.

Written by Jason Oliva

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  • I have no expertise in either the process or the nomenclature but since all of the related HECMs are inactive, that means they are assigned with FHA as the lender. Then there are the HECMs in default and foreclosure and finally those that were FHA REO before the transaction. What an interesting collection of HECM related transactions.

    How many of the related HECMs were fixed rate Standards?

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