Outstanding HMBS rose to a record $56.6 billion in August 2021, as high levels of both issuance and HECM loan payoffs continued. HMBS payoffs once again exceeded $1 billion. Outstanding HMBS rose by about $37 million. These big numbers reflect continued high levels of refinancing, as low rates and high home prices allow more senior homeowners to borrow new, larger HECM loans.
In 2019, HMBS posted its lowest annual issuance total in five years. But in 2020 low interest rates and a higher lending limit boosted production significantly to a near-record $10.6 billion. After eight months in 2021, HMBS new issuance already exceeds $8 billion.
Our friends at Recursion broke down the prepayment numbers further: last month’s 98% MCA mandatory purchases totaled $213 million, only 18.7% of the total.
(Editor’s note: The following article was republished with permission from New View Advisors which compiled this data from publicly available Ginnie Mae data as well as private sources.)