Ginnie Mae Update Michael R. Drayne, Senior Vice President NRMLA Eastern Regional Meeting May 20, 2019 Data as of April 2019
Topics Ginnie Mae At Large: 1. Recently published: Issuer liquidity meeting report; VA RFI – see GinnieMae.gov 2. Upcoming: Ginnie Mae 2020 report; Ginnie Mae Summit (June 13/14 in DC) Reverse Mortgages: Areas of Focus Annual 1. The HMBS Capital Crunch ARM 2. LIBOR replacement 86% 3. Seasoned HMBS production 4. Intra-agency collaboration – coming innovations? 1
HMBS Issuance Is Heavily ARM Focused Over 70% of FY19 HMBS Issuance is tied to LIBOR. Rising LIBOR (and other interest rates) could also result in lower PLFs, thus further decreasing issuance volume. Treasury ARM issuance driven OPB ($M) by pools of highly seasoned loans $3,500 $3,000 $2,500 $2,000 Annual ARM $1,500 86% 2019 Q2 $1,000 LIBOR ARM Breakout $500 $0 Monthly ARM 14% LIBOR ARM Fixed Treasury ARM 2
Issuer’s Responses to Decreased HMBS Production OPB ($M) HMBS Seasoned Issuances* $1,000 $900 $800 $700 $600 $500 $400 $300 $200 $100 $0 *Seasoned is defined as 5 years or more between origination and securitization
FY2018 Saw Peak Mandatory Repurchase Volume From peak HMBS issuance in FY2010 and FY2011, FY2018 observed record HMBS mandatory purchase events. While high levels of repurchases are expected to continue through FY2019, there is expected relief from last year’s high. UPB ($M) MCA Repurchase Volume $9,000 $8,000 $7,000 $6,000 $5,000 $4,000 $3,000 $2,000 $1,000 $0 Note: These modeling results are from September 2018 data – at the current pace thru April 2019, FY2019 MCA Volume is on pace for ~$7.6B 4
Private Market Responses to HMBS Liquidity Pressure In response to a decline in HMBS production volume and increased liquidity pressure, three HMBS Issuers are securitizing non-performing HECMs in PLS Balance at Securitizations Backed by Non-Performing HECMs* Securitization ($M) $1,200 $1,000 $800 $600 $400 $200 $0 *This only includes Moody’s rated securities
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