AAG Leads Record-Large Group of Reverse Mortgage Securities Issuers

The number of active Home Equity Conversion Mortgage-backed securities (HMBS) issuers has hit a new record, according to the most recent data from New View Advisors.

Through the first nine months of 2017, American Advisors Group led a cohort of 16 HMBS issuers as the industry remains on pace to beat 2016’s numbers: In all, firms have issued $7.3 billion in securities during the first three quarters of the year, enough for New View to project that 2017 could surpass last year’s total of $9.2 billion.

For comparison, HMBS issuers set a record in 2010 with $10.7 billion in total securities issued, the New York City-based advisory firm noted.

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AAG’s $1.7 billion in HMBS represented a 23.6% market share, with second-place Finance of America Reverse clocking in at 17.98%. Reverse Mortgage Funding, Ocwen Loan Servicing, and Live Well Financial rounded out the top five, which combined to represent 80.1% of all issuance.

Newcomer Longbridge Financial, which issued its first securities over the summer and topped the monthly leaderboard in August, has shot to eighth place on the overall list with $320 million in issuance for the year so far. The Mahwah, N.J.-based Longbridge received approval from Ginnie Mae to become an HMBS issuer in May, and made its debut in July with two pools worth $55 million.

“Despite the much-reported slowdown in HECM endorsements, HMBS issuance remains robust, aided by growth in tail issuance and without highly seasoned pools,” New View wrote in its commentary. “At this point, endorsement count has become a meaningless metric for gauging industry growth and health.”

Read the full analysis, and check out the complete league table, at New View Advisors.

Written by Alex Spanko

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  • To say that endorsement counts are a meaningless metric is laughable. If we had 100,000 endorsements next fiscal year the standard of a good issuance year would be changed for the better.

    Here is how ridiculous that concept is, if endorsements fell to 10,000 per year for three straight fiscal years is New View Advisers telling us that lender success in year three would exceed the success of fiscal 2017. They really cannot be that out of touch, can they?

    New View seems bent on finding new ways to confuse the picture, not help us. It is not just irritating but downright disgusting at times. They seem to follow their contracts to a T but leave a lot to be desired when it comes to providing true leadership in clarity and transparency.

    So if we use HMBS issuance volume rather than endorsements how are we supposed to compare production in fiscal 2016 to that of fiscal 2006? HMBS issuance provides no picture into senior market penetration or other measurements. If New View Advisers can convert production from day one in terms of HMBS issuance versus endorsements, let them return when they are done so and provide us with answers on how to look at relative year to year success. Until then, I, personally have no patience for this plea to a new standard for measurement.

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