Despite looking a bit different at the end of 2023, there were a lot of similarities in the full-year Home Equity Conversion Mortgage (HECM)-backed securities (HMBS) issuance tables when compared to recent years. One thing that is much different compared to 2022, however, is total issuance.
Here are the top 10 HMBS issuers in 2023 as tabulated by New View Advisors, based on publicly available Ginnie Mae data and private sources the firm has access to.
RankCompany in 2023Market shareCompany in 2022Rank Change1FAR36.9%AAGHold*2Longbridge21.5%FARLongbridge +13PHH Mortgage16.3%LongbridgePHH +24Mutual of Omaha14.9%RMFOmaha +25TMAC/Goodlife2.8%PHH MortgageTMAC +26Guild Mortgage2.7%Mutual of OmahaGuild +4**7MAM2.6%TMAC/GoodlifeMAM +18Plaza1.7%MAMPlaza +19Sun West0.5%PlazaSun West +210Money House0.1%Cherry CreekMoney House +3*AAG was acquired by FAR parent FOA in 2023, leading FAR to absorb AAG HMBS issuance and resulting in a rank hold for FAR. **Guild Mortgage acquired Cherry Creek Mortgage last year, also accounting for a consolidation of data.
Leading players
At the top of the list once again is Finance of America Reverse (FAR), which took nearly 37% of total market share in HMBS issuance last year. While American Advisors Group (AAG) was technically knocked off its perch atop the industry, AAG was acquired by FAR parent Finance of America Companies (FOA), which caused FAR to absorb AAG’s issuance and make this a technical hold on the No. 1 position.
A couple of players are also absent from this year’s list, with the most noteworthy omittance being Reverse Mortgage Funding. RMF saw its HMBS portfolio seized by Ginnie Mae in late 2022, and that portfolio remains one of the largest in the business. Under Ginnie Mae’s control, however, the portfolio has yet to issue any HMBS pools.
“About $301 million of Issuer 42’s portfolio paid off in November, but Issuer 42 still accounts for $18.3 billion, or about 31% of all outstanding HMBS,” New View Advisors said in December, referring to the former RMF portfolio’s designation. “Issuer 42 has not issued any tail pools; we estimate Issuer 42 now has well over a $1 billion uncertificated position, that is, the excess of the portfolio’s HECM asset balance over the balance of its HMBS liability.”
Total HMBS issuance
Ginnie Mae is currently determining its next steps in the HMBS marketplace, including a recent announcement that it will explore an entirely new HMBS product that would be introduced to the market alongside its existing HMBS program. Former Ginnie Mae President Ted Tozer made a similar recommendation last year and lauded the move in an interview with RMD.
From its leading position, FAR issued $2.39 billion for a 36.9% market share, followed by the $1.39 billion issued by Longbridge for a 21.5% market share. Overall, HMBS issuance in 2023 reached $6.485 billion, less than half of the all-time issuance record of $14 billion in 2022.
The top four issuers accounted for roughly 90% of all HMBS issuance in 2023, New View reported.
Looking ahead
While both HECM volume and HMBS issuance ended 2023 on something of a low note, there is not a lot of difference expected from issuance levels in January’s data, which will likely become available late this week.
“December production reflects applications and originations from 2-3 months prior when the expected rate was at or near its highs,” Michael McCully, partner at New View Advisors, said earlier this month. “We don’t expect January to be much different.”
But if the rate environment becomes more favorable and origination volume picks up on the back of a new HECM limit, that could change.
“Expect origination volume to increase if the 10-year treasury stays below 4% and home values remain stable,” McCully said. “The increased maximum claim amount [i.e., the HECM limit] for 2024 should help volume, too.”
