Home Equity Conversion Mortgage lenders ended 2017 on a positive note, thanks to a relatively strong fourth quarter, according to an analysis of FHA data. Total reverse mortgage originations rose 3.0 percent from the third quarter to end the year with $18.4 billion in overall HECM production. This was up 23.2 percent year-over-year. Purchase HECMs accounted for 76.2 percent of reverse mortgage originations in 2017. Adjustable-rate HECMs comprised 89.3 percent of loans made. Meanwhile, HECM mortgage-backed securities issuance totaled $2.25 billion in the fourth quarter, buoyed by $1.35 billion of HMBS issued in December, Ginnie Mae data show. The top five HMBS issuers accounted for $5.72 billion or 31.1 percent of all HMBS issued in 2017. American Advisors Group remained the dominant HECM lender in 2017, producing $2.8 billion over the 12-month period, which represented a ... [ Chart ]

The home-equity lending business quietly built some momentum over the past three years after nosediving in the aftermath of the housing-market meltdown, but its future growth will depend on several moving parts.

The Department of Housing and Urban Development and the Federal Deposit Insurance Corp. have announced offerings of multiple residential reverse mortgage pools for sale to investors. The HUD pools are comprised of approximately 650 reverse mortgage notes with a total loan balance of about $136 million. The sale consists of due and payable first-lien reverse mortgages secured by single-family, vacant residential properties where all borrowers are deceased and none is survived by a non-borrowing spouse. The reverse-mortgage sale is the third offering of its type. As with past offerings, the sale will be by competitive bidding on April 11, 2018. The loans will be sold without FHA insurance and with servicing released. The loans are expected to be offered in regional pools. Meanwhile, the FDIC will unload in open auction 3,280 FHA-insured reverse-mortgage loans from the ...

The reverse-mortgage industry is in an uncomfortable place in the first quarter of 2018 due to lower volumes, higher costs and lower margins – the same issues that ail the traditional forward-lending business currently, says a new analysis by the Stratmor Group. Applications and counseling requests are down more than expected for this time of the year despite the recent rule changes implemented by the Department of Housing and Urban Development to ensure the long-term viability of the Home Equity Conversion Mortgage program. Stratmor projects HECM volume at $1.6 billion in 2018, down from approximately $2.0 billion in 2017, due mainly to dwindling refinances. “Given the reduction in the interest-rate floor, it is reasonable to expect that gain-on-sale margins will decline, but just how far, who knows,” said Jim Cameron, a senior partner at Stratmor. “The reduction in unit ...

Banks and thrifts increased their first-lien holdings by 4.1 percent in 2017, according to a new ranking and analysis by Inside Nonconforming Markets. Big banks continue to retain jumbo mortgages in portfolio along with some loans eligible for sale to the government-sponsored enterprises. A total of $2.01 trillion in first-lien mortgages were held by banks and thrifts as of the end of 2017, up 1.2 percent from the end of September. Adjustable-rate mortgages ... [Includes one data chart]

Issuance of non-agency mortgage-backed securities backed by non-qualified mortgages could triple this year, according to Jeremy Schneider, a senior director at S&P Global Ratings. According to Inside Nonconforming Markets, $4.08 billion of expanded credit non-agency MBS was issued in 2017, with non-QMs accounting for a large share of the issuance. Schneider and other industry participants discussed non-QMs at the SFIG Vegas conference produced by Information ...

Issuance of jumbo mortgage-backed securities flourished at the start of the year, prompting projections that volume could double compared with 2017, but the market isn’t expected to grow to anywhere near pre-crisis levels. Baron Silverstein, a managing director at Bank of America Merrill Lynch, said he expects to see more issuers enter the maket and that issuance could hit $20.0 billion this year. He was speaking at the SFIG Vegas conference produced by Information Management Network and ...

After issuing two jumbo mortgage-backed securities in 2017 on a shelf created by Credit Suisse, an affiliate of AIG Asset Management is launching a deal on its own. Pearl Street Mortgage Company 2018-1 looks a lot like previous AIG deals save for the change in shelf registration. However, the planned $446.17 million issuance will have somewhat higher credit enhancement on the senior tranche than the other MBS. The new issuance received preliminary AAA ratings from Fitch Ratings and ...

With comprehensive housing-finance reform looking unlikely to be passed by Congress anytime soon, some industry analysts project that the Trump administration will take administrative actions to shrink the roles of the government-sponsored enterprises. Under a plan detailed last week by the American Enterprise Institute, the GSEs could be eliminated over time without legislation, with the non-agency market filling the void. The “Taxpayer Protection Housing Finance Plan” was ...

Jumbo mortgage lending – including agency-eligible mortgages that exceed normal loan limits – lost some market share in 2017, according to a new Inside Mortgage Finance ranking and analysis.