Ginnie Mae mortgage bond issuance falls to low last seen in July 2020

Ginnie Mae mortgage-backed securities issuance in August fell to a low last seen over a year ago as it inched closer to more normal levels of activity.

New MBS totaled nearly $71 billion during the month, down from more than $74 billion in July and nearly $76 billion a year ago. That reduced the monthly volume of securitized home loans insured by the government agency to roughly half of what it was at its peak in April. Issuance hasn’t been this low since July 2020, when it was a little over $70 billion.

“Although loan production is falling, Ginnie Mae continues to see strong MBS issuance and steady investor demand,” said Michael Drayne, acting executive vice president at Ginnie Mae, in a press release.

While overall issuance was down in the near term last month, it remained historically strong, particularly in the market for home equity withdrawal loans made to borrowers age 62 and up. Some public lenders have been more focused on originating reverse mortgages recently because the margins on them have been relatively higher than for traditional home loans.

Issuance of securities backed by Home Equity Conversion Mortgages fell only slightly in August to just below $1.1 billion in August from $1.14 billion in July, but was up considerably from $859 million a year ago due to strong refinancing activity, according to New View Advisors’ analysis of Ginnie Mae’s data.

HMBS issuance is on track to set a new record this year. It totaled $8 billion through August and previously the most ever issued in one year was $10.8 billion, NVA noted in a recent report. Issuance of securitized reverse mortgages hasn’t been this high since 2010.

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