HMBS Maintains Healthy Clip in February

HMBS issuers sold $635 million in new pools during February 2015, the third highest total since December 2013. Issuance was down from the $712 million in January but up 29% from February 2014, when a paltry $494 million was issued. This marks the fifth straight month that issuance has exceeded $600 million. With interest rates still low and financial assessment postponed, we expect this trend to continue.

Tail issuance held steady at 23% of total monthly dollar issuance, and 41 of the 83 pools issued.

Issuers continue to benefit from both the higher PLFs enacted in August 2014 and the relatively large borrower draws now rolling in as many loans reach their 13th month, when draw restrictions expire.

Fixed rate issuance also held steady at about 24% of total HMBS issuance in February 2015, reflecting the typical product mix brought on by FHA’s program changes.

Newly originated loans comprise a large majority of HMBS issuance in any given month, and a very large majority of current production HECM loans are securitized into HMBS. As a result, HMBS issuance is a good barometer of recent HECM production.

HMBS float is now $50.4 billion, comprised of 4,041 issues, up from $50.2 billion at the end of January.

So far in 2015, overall Ginnie Mae issuance is $53.6 billion, compared to just over $44 billion in the first two months of 2014. (These figures include both forward and reverse, Ginnie Mae I and Ginnie Mae II securities.)

(Note: The following was published by New View Advisors, which compiles rankings from publicly available Ginnie Mae data.)