HMBS Tops $1B in July, Live Well Exits GNMA Pools

The production of new Home Equity Conversion Mortgage-backed securities (HMBS) rose in July to just over $1 billion, marking the third highest monthly total for new production this year. This is according to publicly available GNMA data and private sources compiled by New View Advisors.

“Half of this month’s total issuance, the largest in 15 months, was from one large highly seasoned CMT pool,” New View writes in its accompanying commentary. “Last month’s tail pool issuances totaled $222 million, within the range of recent tail issuance. With rates trending lower, we may be seeing the benefit of lower interest rates helping new origination volume.”

Also noted is the fact that recently-shuttered reverse mortgage lender Live Well Financial is now no longer an issuer of record for any HMBS pools of the Government National Mortgage Association’s (GNMA, or “Ginnie Mae”).

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It was reported in December that Live Well sold the majority of its HMBS issuance portfolio – $4 billion worth – to Reverse Mortgage Funding, LLC (RMF). That acquisition placed RMF as the owner of the largest HMBS issuance portfolio industry-wide, New View noted at the time.

“RMF acquired the rights to the Live Well pools issued from December 2018 through June 2019,” New View writes in its newest commentary. “These pools totaled just under $200 million in unpaid balance as of last month. Late last year, RMF acquired over $4 billion in issuer rights, consisting of all outstanding HMBS pools issued by Live Well through November 2018.”

The pool designated BN4497 is the final pool issued by Live Well, says New View. Live Well ceased originating new loans in May and is currently embroiled in a forced bankruptcy lawsuit with several creditors. In May, Live Well issued 6 HMBS pools for a total of approximately $23 million, though its operations are still believed to have been active for the first two full days of that month.

July’s production of original new loan pools totaled approximately $321 million, slightly less than June’s year-high figure of $331 million. July’s tail pool issuances totaled $222 million, which is within the range of recent tail issuance, according to New View.

“With rates trending lower, we may be seeing the benefit of lower interest rates helping new origination volume,” New View writes.

Read the full commentary at New View Advisors.

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