Chart of the Day: Consumers Overwhelming Choose Fixed Rate Reverse Mortgage

While it’s no secret fixed rate reverse mortgages have become more popular, you don’t understand how much has changed in the last year unless you look at a chart showing what type of loans are being endorsed each month.

Data from the US Department of Housing and Urban Development shows only 3.9% of endorsements during January 2009 were fixed rate HECMs.  The adjustable rate reverse mortgage product dominated the marketplace with 95.87% of total volume during the same month.

Only a year later, fixed rate reverse mortgages grew to 68.28% of endorsements during January 2010, while adjustable rate products fell to 31.69% of endorsements.

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Driven by investor demand for Ginnie Mae fixed rate HMBS product and lower costs for consumers, it’s no surprise there has been such a large shift.

Chart: RMD – Product Type 2009-March 2010

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RMD - Product Type 2009-March 2010

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