Ginnie Mae this week announced record mortgage-backed security issuance for 2017, including both forward and reverse products.
Total issuance in fiscal 2017 — which ended September 30 — came out to $504.6 billion, a new high water mark that fell significantly above last year’s total of $466.6 billion. The government corporation’s outstanding unpaid principal balance currently totals $1.884 trillion, up from $1.728 trillion at the end of fiscal 2016.
Meanwhile, on the Home Equity Conversion Mortgage-backed securities (HMBS) front, prepayments in September yet again exceeded $1 billion according to the most recent data from New View Advisors. That’s the third-highest month of all time, and represented the 13th consecutive month in a row that prepayments outstripped new issuance: HMBS originators created 114 new loan pools for a total of $879 million.
Fourteen issuers participated in the HMBS issuance game this month, with 49 original loan pools and 65 “tails” — issuances consisting of uncertificated portions of HECMs that had already been securitized, according to New View.
“September’s tail issuance was strong: about $252 million,” New View noted in its monthly commentary.
The net effect is an HMBS market growth of just $12 million from August, with the overall landscape remaining static at $55 billion for another month. As New View has pointed out in previous months, the solid growth continues to be outdone by record-high payoffs that stem largely from loans reaching 98% of their maximum claim amounts (MCA).
For instance, in September, 98% MCA claims accounted for $614 million of the $1 billion in payoffs; back in September 2013, those prepayments only accounted for 29.8% of the overall total, or $92 million.
Written by Alex Spanko