Live Well Sells $4B HMBS Portfolio to RMF, Peak Buyout Ends

Live Well Financial has sold the majority of its Home Equity Conversion Mortgage-backed securities (HMBS) issuance portfolio – $4 billion worth – to Reverse Mortgage Funding, LLC (RMF), according to GNMA data cited by New View Advisors in recent commentary.

The acquisition places RMF as the owner of the largest HMBS issuance portfolio industry-wide, New View notes. The company acquired Sun West’s $1.8 billion servicing portfolio in 2015.

“The Ginnie Mae data reveals Reverse Mortgage Funding bought Live Well Financial’s issuance portfolio totaling just over $4 billion,” the commentary reads. “That gives RMF an outstanding portfolio of almost $12.7 billion, surpassing Nationstar Mortgage as the top issuer portfolio.”

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Live Well will continue to actively aggregate and trade volume of both reverse mortgage and forward mortgage-backed securities, Live Well Executive Vice President Bruce Barnes tells RMD.

“Buying and selling MSRs is very common within the mortgage industry,” he said. “Selling certain MSRs within our portfolio has always been part of our strategy and will continue to be.”

The company plans to maintain its strategy and is targeting expansion in both forward and reverse markets in the new year, Barnes said.

“Our 2019 strategy is about expanding our wholesale and field retail footprints in both reverse and forward… our expansion into forward is something that we have been working towards and expanding rapidly,” he said.

Terms of the deal between Live Well and RMF will not be disclosed.

Since its founding in 2013, RMF has grown considerably in the HMBS space, typically ranking within the monthly top five for HMBS issuers. For November 2018, RMF ranked number four on the list of top five HMBS issuers with $44.8 million of new production at 15.1 percent market share. According to data from Baseline Reverse, RMF sits in third place in full-year 2018 HMBS issuer rankings, with $614 million of new production at 16.3 percent market share since January.

Also in November, it appears that “Peak Buyout” has ended, according to the New View commentary.

“Although many loans continue to reach their buyout threshold, equal to 98% of their Maximum Claim Amount (“MCA”), Peak Buyout appears to have ended,” New View writes. “Peak Buyout is an echo of the peak issuance from 2009 through the first half of 2013. Much of this production has already been repurchased or repaid by borrowers. From now on, billion-dollar-plus payoff months should be the exception rather than the rule.”

Written by Elizabeth Ecker and Chris Clow