At $4.27 billion for the first six months of 2015, HREMIC issuance is already at 85% of 2014’s full-year issuance of $5.05 billion, and is expected to surpass 2012’s record $6 billion of issuance, according to the latest Ginnie Mae data compiled by New View Advisors. 

Fifteen transactions underwritten by three sponsors — Nomura, Bank of America Merrill Lynch (BAML) and Credit Suisse — contributed to the volume, with Nomura capturing the No. 1 slot for the first half of the year, ending BAML’s nearly six-year reign by just $16 million. 

Nomura has issued five HREMICs totaling $1.47 billion, or 35% of the year’s total thus far, while BAML has issued four HREMICs totaling $1.46 billion, or 34% of the all HREMICs issued in the first six months of the year. 

Still, BAML has issued 45% of all HREMICs life-to-date, while Nomura has issued just 9%. Credit Suisse, on the other hand, has issued a little less than 6% of all HREMICs, and was the third underwriter this year with six issuances totaling $1.33 billion.  

While there have been a total of 14 different HREMIC issuers since 2009, with RBS dropping out of the business, this is the first time just three dealers represented 100% of HREMIC issuance.

Also notable is the pace of this year’s issuance. 

“Issuance in 2015 is on pace to smash through 2012’s record $6 billion of HREMIC issuance,” New View writes. “BAML’s $730 million 2015-H13 transaction was the largest HREMIC ever issued.”

In comparison, at this time last year, HREMIC issuance was on pace with 2013 volume, with just $2.37 billion in transactions completed in the first half of 2014. 

Now, approximately 57% of all home equity conversion mortgage (HECM) mortgage-backed securities (HMBS) have been resecuritized into HREMICs.

HREMIC collateral consists of HMBS, which are Ginnie Mae guaranteed “pass-through” securities backed by pools of participations of Federal Housing Administration-insured HECMs.

Read New View’s commentary here. 

Written by Emily Study