As reverse mortgage loan production steadily declines, so too has the issuance of the securities backed by this product on the secondary market.
Issuers of HECM-backed securities, or HMBS, brought just under $1.7 billion to market in the first quarter of 2019, according to the latest report from New View Advisors. This is a 44% decline from last year and the lowest total in five years.
The top five players in the HMBS market accounted for 79% of all HMBS issuance, although there are 15 active issuers in the space, New View said.
Here are the top five HMBS issuers:
No. 1: American Advisors Group
$391 million issued in Q1, 23.5% market share
No. 2: Reverse Mortgage Funding
$323.5 million issued in Q1, 19.5% market share
No. 3: Finance of America Reverse
$244 million issued in Q1, 14.7% market share
No. 4: Ocwen Loan Servicing (affiliate of Liberty Home Equity Solutions)
$210.6 million issued in Q1, 12.7% market share
No. 5: Nationstar
$142.7 million issued in Q1, 8.6% market share
Recent New View data also revealed that total HMBS issuance for March totaled $558 million, in line with recent lows.
In all of 2018, HMBS issuance totaled about $9.6 billion, compared with 2017’s $10.5 billion. New View said this is likely the new normal.
“Unless highly seasoned pool issuance makes a meaningful and lasting return, expect lower HMBS issuance volume going forward,” they wrote. “For the past few months, the new issuance market has settled into Groundhog Day mode, with very similar volume statistics other than the occasional seasoned first participation issue.”