HMBS exceeds $2 billion in Q1 2015

First quarter issuance in 2015 was just over $2 billion, 17% higher than the $1.7 billion issued in the first quarter of 2014, and marks the highest quarterly HMBS issuance since the 4th Quarter of 2013.

HMBS issuers sold $660 million in new pools during March 2015, the third highest total since January 2014. Issuance was up from the $635 million total in February and up 29% from March 2014, when only $510 million was issued. This marks the sixth 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 25% of total monthly dollar issuance, and 58 of the 101 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 fell to 21% of total HMBS issuance in March 2015, reflecting the increasing dominance of adjustable rate product 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.

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