The Federal Housing Administration is reporting that reverse mortgage applications were up 10.4% in April, coming it at 8,169 units during the month. April marks the third straight month over month increase in applications and is a good sign that lower costs for consumers are helping to drive demand.
Despite the number of applications being down 40% from the same period last year, the industry has been quietly optimistic for the last couple of months even though it’s facing more regulation and the potential for another principal limit reduction for FY 2011. With applications continuing to increase, the data confirms that business is improving a bit.
Looking at a chart from RM Insight displaying the last three years of endorsement volume, numbers have yet to catch up even though applications are increasing. Since endorsement reports from HUD trail a couple months behind actual origination dates, many are hopeful we will see a bump in volume soon.
During April, the industry endorsed 5,511 HECMs, down 5.3% from March. The only increase in business came from the HECM for purchase, which up 26.3% from March and 583.6% from the same period in 2009.
The total number of applications for FHA mortgage insurance was 215,578 during April, consisting of 150,935 purchase cases, 56,474 refinance applications as well as 8,169 reverse mortgage applications said the agency.