For an industry that was mainly dependent on one investor only a year ago, things look a lot different in today’s reverse mortgage market.
Fannie Mae has seen its market share of reverse mortgages go from approximately 90% as of December 31, 2008, to 20% during the 3Q and 10% in September 2009. According to a recent SEC filing, the drastic change in market share comes from its pricing strategy and market conditions.
Ginnie Mae has taken over for Fannie Mae and has become the dominant outlet for reverse mortgage lenders, with over $5.7 billion issued in 2009 and demand for the HMBS product isn’t slowing. In fact, “There really isn’t enough supply,” said David Fontanella, Knight Libertas, at the National Reverse Mortgage Lenders Association Annual conference in San Diego.
The demand comes from a group of about 25 different companies and are mostly large institutions said Fontanella. “The industry has gotten the attention of the companies and people who can really shape a marketplace.”
Currently, there are nine issuers for the HMBS product and a backlog of applications waiting for approval. A Ginnie Mae representative told the conferences that it expects the number of issuers to rise in the coming months.