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47 » VISIT US ONLINE @ DSNEWS.COM WHAT'S IMPACTING HMBS PERFORMANCE? e issuance of new Home Equity Conversion Mortgage-backed securities (HMBS) has remained stable at slightly above $567 million according to an analysis by New View Advisors, citing Ginnie Mae HMBS data. e analysis said that the data was consistent with recent months that have seen a much lower issuance compared to the past. e data revealed that 86 pools were issued in April, including about $300 million of new first participation pools compared to 120 pools totaling $1.2 billion sold by HMBS issuers during the same period last year. New View projected that HMBS float shrinkage will continue "as April's payoffs are almost certain to outweigh new issuance and interest roll-up." Additionally, the analysis said that reverse mortgage lenders were facing a "new era of reduced volume, primarily due to the lower PLFs for Home Equity Conversion Mortgages (HECMs)" that has been in effect since the beginning of 2018. Looking at past years' data, it found that HMBS issuance had reduced to a total of $9.6 billion in 2018 compared to $10.5 billion in 2017. "e HMBS market will be hard pressed to equal last year's totals, which include some HMBS issuance backed by new HECM loans originated at higher PLFs," New View said in its analysis. For 2019, New View saw similar volume statistics "other than the occasional seasoned first participation issue: $300 million in April, $277 million in March, $274 in February, and $304 million in January. April's tail pool issuances totaled $221 million, within the range of recent tail issuance." e analysis also commented on the recent HMBS pools of Live Well Financial, which has issued over $160 million in HMBS pools since it sold HMBS books to RMF in 2018. In April, Live Well issued nine HMBS pools totaling $32 million, the analysis revealed. Breaking up the pool issuance, New View said that the April 2019 issuance was divided into 36 original pools and 50 tail pools. Original pools are those HMBS pools backed by first participation in previously uncertificated HECM loans. Tail HMBS issuances are HMBS pools consisting of subsequent participation. Tails are not from new loans, but they do represent new amounts lent. Tail HMBS issuance can generate profits for years, helping HMBS issuers during challenging times. WHEN TORNADOES STRIKE Tornadoes can be devastating, and analyzing the damage a tornado can cause before it happens could allow insurers to anticipate claims volume and adjust deployment appropriately and quickly. According to CoreLogic, the data within its Tornado Path Maps will be updated every 15 minutes following a tornado, "displaying area probabilities (from 10% up to 90%) of tornadic damage." CoreLogic states that this frequency of updates should allow "insurance carriers to quickly calculate claims needs, this parcel-level exposure analysis means emergency responders, utility companies, transportation departments, and others will be able to quickly determine resource allocation and deployment to begin offering on-the-ground support to the people and properties affected." Curtis McDonald, Senior Professional Product Management and Meteorologist for CoreLogic Weather Verification Services, said, "Until now, understanding exposure from tornadoes has been a daunting challenge for insurers, as typical ground-based observations and reporting are hampered due to infrastructure damage when a tornado moves through an area. ese challenges can create frustrating policyholder experiences. Our goal with Tornado Path Map is to enable insurers to efficiently and accurately identify customers under duress immediately following tornadic storms, meaning they're able to assist with communications and swift response to help their policyholders in need." Without proper insurance, many homeowners impacted by natural disasters such as tornadoes may be at increased risk of foreclosure. CoreLogic's 2019 Insurance Coverage Adequacy Report reveals how underinsurance can leave an impact on the lending industry. According to Frank Nothaft, Chief Economist for CoreLogic, "e disruption of a family's regular flow of income and payments, as well as substantial loss in property value, can trigger mortgage default; especially if homeowners are underinsured and cannot afford to rebuild." Disruption to income from natural disasters including wildfires, tornadoes, and hurricanes can lead to mortgage defaults, and CoreLogic notes that delinquency and foreclosures typically spike in an affected area following a disaster. "e financial impact of underinsurance touches everyone; this is especially true after a catastrophic event where widespread property damage can cost billions of dollars," CoreLogic said. Early-stage delinquencies are increasing, as indicated by CoreLogic. The share of mortgages 30- to 59-days past due was 2% in March 2019 compared with 1.8% in March 2018. KNOW THIS

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