Outstanding HMBS rose to a record $56.7 billion in September 2021, as high levels of both issuance and HECM loan payoffs continued. HMBS payoffs once again exceeded $1 billion, for the seventh month in a row. Outstanding HMBS increased by about $106 million. These big numbers reflect continued high levels of refinancing, as low rates and high home prices allow more homeowners to borrow new, larger HECM loans.
In 2019, HMBS posted its lowest annual issuance total in five years, but 2020’s low interest rates and higher lending limits boosted production to a near-record $10.6 billion. As mentioned in previous blogs, for the first nine months of 2021, HMBS new issuance already exceeds $9 billion, on pace to set a new annual volume record.
Our friends at Recursion broke down the prepayment numbers further: last month’s 98% MCA mandatory purchases totaled $238 million, only 19.8% 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.)