Following four consecutive months of increases, new issues of Ginnie Mae HECM mortgage-backed securities (HMBS) fell by 25% in May.
After reaching the second highest total in the previous 18 months to $1.029 billion in April, new issues of HMBS hit the third lowest total in the same time period, reaching $771 million. Total issuance by Ginnie Mae I & II MBS for the month was down by 3.7% from $26.4 billion to $25.4 billion. Issuance of single-family MBS topped $23.85 billion, while multi-family issuance was over $1.57 billion.
The new issues of Ginnie Mae HMBS have followed a semi-consistent pattern over the past 15 months of raising for several months before dropping off again. The drop off in May marks the second largest drop off since new issuance reached a peak in February of $1.45 billion and then fell to $751 the following month.
The current remaining principal balance of HMBS pools reached $25.26 billion in May, which is 2.16% of the total outstanding balance of Ginnie Mae MBS pools of over $1.16 trillion.
Ginnie Mae noted that over all the activity in their MBS market has been steady giving investors confidence in the government backed securities.
“The consistent performance of the Ginnie Mae MBS over the last several months has been very important to the secondary market as the economy continues to rebound,” said Ginnie Mae President Ted Tozer. “Issuers depend upon the strong pricing and execution of the Ginnie Mae MBS as a way to maintain the flow of capital for new mortgage loans, and investors depend upon the security of guaranteed timely interest and principal payments.”