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Reverse mortgage M&A shifts toward consolidation as HECM volumes stall
New View Advisors’ Michael K. McCully links the deal activity to stagnant HECM volume, excess industry capacity, and a shrinking HMBS issuer base.
HousingWire reports that reverse mortgage mergers and acquisitions are increasingly being driven by efficiency and balance sheet risk exposure, according to Michael K. McCully, a partner at New View Advisors.
McCully points to stagnant HECM volumes in recent years and excess capacity across the industry as key contributors, arguing it is more efficient to consolidate into fewer, larger originators and specialty issuers of the securities.
The same structural pressure is reflected, he says, in issuer concentration, with the number of major HMBS issuers declining over time and, in his view, trending toward three large participants: Finance of America, Mutual of Omaha, and Longbridge.
HousingWire adds that McCully cites this dynamic as a backdrop for prior activity, including Onity selling much of its business to Finance of America.