Chart of the Day: FHA’s Reverse Mortgage Volume Projections

The Department of Housing and Urban Developement published the actuarial report for the HECM program and revealed the Federal Housing Administration’s volume predictions for the future.

According to the report, with the introduction of the HECM Saver option in FY 2011, FHA projects the number of reverse mortgages to increase by 6 percent to 85,217 in FY 2011, and continue to increase to 144,361 by FY 2016. The average Max Claim Amount per endorsement is expected to decrease in FY 2011 due to Moody’s projected house price depreciation and the expiration of the temporary FHA loan limit increase.


To view a larger version of the chart, click here.

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Chart: FHA Reverse Mortgage Predictions

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FHA Reverse Mortgage Predictions

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    • 2545,

      The 111th Congress gave us an extension through 9/30/2011 in a Continuing Resolution funding bill for HUD passed at the end of the last fiscal year. NRMLA leadership believes there is a chance the lending limit will revert back to $417,000 after that. See the article Admin posted on RMD on 11/15/2010 entitled “FHA Mortgage Subsidies Unlikely as Congressional Leadership Changes” for a statement by Mr. Peter Bell on the subject.

  • To be clear the actuary report has some errors. The first is the percentage growth in HECMs needed to get to 85,217 for the fiscal year ending September 30, 2011. It will have to 8.2% not the 6% cited above. The reason is that the actuary report on Page 8 shows 80,369 HECMs endorsed last year while the annual report released by HUD this week showed it endorsed 78,757 HECMs last fiscal year.
    I like the projections produced by John Lunde for next year much better than those produced by the actuaries. In fact even mine look more optimistic than theirs and I thought mine were overly pessimistic and conservative.
    The projection for 2017 by the actuaries is less than 145,000. My projection for 2018 is a little less than 2 and one-half of that amount. To get to their numbers, one needs an average annual growth rate of 9%. To get to mine, you need an average annual growth rate of 20.5%. I have no idea what the numbers are for John after 2014.
    Who knows where we will be on 9/30/2011, a little over 10 months from now?

  • Folks, Admin especially, please forgive me.

    I am off topic, but this is the most recent post and it’s very important for our family to find an answer. I’ll make it brief.

    Mom lives in and owns only one home, 86 years old widow, has $750,000 free and clear equity in the home. Home is in the US Virgin Islands (ZIP 00830). She goes to the only mortgage company down here in the VI licensed to offer HECM loans. She jumps through all the FHA loops. Days before supposed closing, mortgage company calls back saying they can’t +/- “find a wholesale buyer stateside that will ‘buy’ the loan”?? Now, widow is stuck and bank with who she has a small mortgage on her home with is threatening foreclosure. HELP! (She’s my Mom!) Any ideas?!

    Grateful for any ideas. How bit this? Person providing solution gets to stay at our home here in St John, VI for a week. I am not joking. We are truly desperate. And yes, I checked with the BofA’s, JJ Nutter’s and so forth, all the “big boys” already.

    Thanks so much.

    Eric

    elaimins@aol.com

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