The latest FHA Outlook Report provides some interesting insight into the Home Equity Conversion Mortgage (HECM) program for FY 2009. While the industry experienced another record year of volume, data shows it wasn’t due to a flood of new reverse mortgage borrowers.
Overall, reverse mortgage lenders originated $29.9 billion of HECMs in FY 2009, compared to $24.7 billion in FY 2008. Additional numbers from the report include:
- Traditional HECMs (non HECM to HECM refi) were down 2.3%, 105,233
- 560 HECM for purchase loans endorsed
- 8,985 HECM refinances – up 102.6% compared to FY 2008
- Refinances totaled 7.8% of all HECMs, up 4% from FY 2008
The industry clearly experienced an additional boost from the higher loan limits which helped refi volume significantly. If it experienced the same number of refinances as last year (4,435), FY 2009 totals would be 110,256 (less than FY 2008).
While Congress extending higher reverse mortgage limits through 2010 is clearly a good thing, it will be a challenge to keep the record setting pace.