Securitizations backed by reverse mortgages are expected to boom in the second half of this year, with as many as six deals being discussed in the market, according to private and rating agency sources. The sector has piddled along in recent years, restrained by low volume and secondary market unfamiliarity. Now, sizable strides in origination volume and more accommodating regulatory changes have drawn the interest of investment bankers - always happy to stumble upon a new and, at least initially, higher-yielding asset class.
"We're pretty bullish about the growth of our industry, and particularly as it relates to the secondary market. We're getting a lot of interest from traditional investors that have been buying bonds and loans in the (traditional mortgage) market," said Jim Mahoney, chief executive of Financial Freedom Senior Funding Corp., a subsidiary of IndyMac and the largest U.S. reverse mortgage lender by market share.