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HREMIC Issuance Steady at $2.37 Billion

The issuance of HREMICs — or the real estate mortgage investment conduits comprising reverse mortgage securities — is on pace with 2013 volume, as $2.37 billion of transactions were completed in the first half of 2014, according to the latest Ginnie Mae data compiled by New View Advisors

Twelve transactions underwritten by four different sponsors contribute to the volume, with Bank of America Merrill Lynch topping competitors with the highest market share. BAML holds a 43% share, issuing a little more than $1 billion of HREMICs. The Royal Bank of Scotland (RBS) was second with three issuances totaling $741.7 million.

Stifel, with three transactions, and Nomura, with one, round out the volume, with issuances totaling $472.4 million and $138.4 million, respectively. 

First-half issuance is steady compared to 2013 volume, New View reports. For all of 2013, six underwriters sponsored 26 transactions for $4.9 billion. In comparison, 31 transactions were issued in 2012 for slightly more than $6 billion.

The HREMIC first rolled out in 2008, allowing for inclusion of HECM-backed mortgage securities.

Read New View’s commentary here

Written by Emily Study