A look at Biden’s first week in office

This episode reviews last week’s inauguration of President Joe Biden, examining which housing issues the new administration has already taken action on.

Biden’s executive order will extend foreclosure moratorium

President Biden revealed his plan to sign 17 executive orders his first day in office, including am extension of the eviction and foreclosure moratorium to at least March 31.

How servicers continue to protect neighborhoods amid COVID

We spoke with MCS CEO Caroline Reaves about self-service technology, the shift to virtual and how servicers can prepare for post-COVID success by improving processes today.

HomeBridge’s Brian White on diversity at a practical level

HomeBridge's Brian “Woody” White discusses ways to increase diversity within the housing finance industry.


Reverse mortgage securities continue decline

Issuance totals highlight liquidity concerns

The latest data on HECM-backed securities shows issuance continued its decline in October, and while HMBS float last month was up slightly to $55.5 billion, most of that can be attributed to highly seasoned collateral and not to new production.

This means that it’s only a matter of time before HMBS float falls below the $55 billion mark – a vector that indicates less liquidity for investors.

According to a report released by New View Advisors, HMBS issuance in October totaled just over $1 billion, but $473 million of this was due to highly seasoned issuance.

New loan pools totaled just $325 million in October, down from $360 million in September and $615 million in October 2017.

New View’s Michael McCully said Reverse Mortgage Funding has bolstered issuance totals with pools of highly seasoned collateral, but a deeper dive reveals the stark reality of a struggling market.

“RMF continues to purchase highly seasoned HECM collateral and turn them into HMBS,” McCully said. “Without the RMF highly seasoned HMBS issuance, outstanding HMBS float would have long ago breached $55 billion on the downside.”

“While $55 billion is not a significant threshold by itself, a drop below the historical range of $55 to $57 billion signals new originations are not keeping up with payoffs,” McCully continued. “At what point does declining float affect HMBS liquidity?”

New View data also shows that the industry might be witnessing the end of a massive wave of payoffs to the Department of Housing and Urban Development.

When loans reach their maximum claim amount of 98%, lenders have the option of assigning them to HUD for payment.

Recently, HUD has been burdened with a glut of payments from loans originated during the HECM’s peak years that are now reaching maturation.

“While aggregate payoffs continue to hover around $1 billion per month, assignments to HUD continue to slow, suggesting we are increasingly likely past ‘peak buyout,’” McCully said, explaining that the glut is a result of loans issued from 2009 through the first half of 2013.  

McCully said $632 million worth of HECMs were assigned to HUD last month, down from August’s record $869 million.

“Much of this production has already been repurchased or repaid by borrowers,” New View's report explained. “Payoffs have exceeded $1 billion per month for 12 of the last 15 months as many loans reached their buyout threshold.”


Most Popular Articles

United Wholesale Mortgage makes public debut

United Wholesale Mortgage’s debut caps a wild six months for IMBs across America, in which a dozen large or mid-sized firms revealed plans to go public.

Jan 22, 2021 By

Latest Articles

SitusAMC acquires Assimilate Solutions

Technology firm SitusAMC announced its acquisition of mortgage and title outsourcer Assimilate Solutions on Monday – it’s second acquisition in January.

Jan 25, 2021 By
3d rendering of a row of luxury townhouses along a street

Log In

Forgot Password?

Don't have an account? Please