Reverse Mortgage Applications Fall 38%, New FHA HECM Volume Projections

The number of reverse mortgage applications fell 38.8% in October, coming in at 8,249 units according to data released the the Department of Housing and Urban Development (HUD).  The drop was expected after the number of applications spiked prior to HUD lowering the principal limits for the HECM program.  While the drop is significant, it’s 40% better than the 5,892 applications from October 2009.

Total applications for FHA came in at 175,421 during October, down 31.5% from the month before.

Endorsements for reverse mortgages came in at 5,279 units during October with a max claim amount of $1.3 billion according to the report.


Since October is the start of the fiscal year, the report also shows HUD projections for FY 2011.  For FHA’s reverse mortgage program, the agency projects there will be 80,000 applications and 75,000 endorsements with a max claim amount of $18.7 billion.  These are lower than totals for FY 2010, which came in at 79,106 endorsements with a max claim amount of $21.1 billion.

The projections are also different than the 85,217 units included in the actuary report released earlier this week.

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

Chart: Reverse Mortgage Application Trends


Reverse Mortgage Application Trends

Powered By: iCharts | create, share, and embed interactive charts online

Join the Conversation (1)

see all

This is a professional community. Please use discretion when posting a comment.

  • It is odd to see an industry expert like John Lunde estimating about 100,000 endorsements for this fiscal year and HUD not only predicting a 25% lower amount but also predicting one that is lower than last year.
    While the gross number is important, so is the composition of the number. How many of those are estimated to be Savers and how many Standards? What percentage of each category is adjustable rate and fixed rate? HUD will have access to that info but it would be good if Reverse Marketing Insight tracked and provided that info to its customers and the industry.
    When it comes to projecting losses HUD treats adjustable rate HECMs as if borrowers take lump sums. Is that true on Savers in computing their net revenues? While full draws may be safe to assume on Standards, applying that assumption to adjustable rate Savers seems questionable. Logically, Saver adjustable rate borrowers should be less prone to take all available proceeds.
    This is splitting hairs but how does HUD know how many actual applications have been taken in any one month? While HUD has a handle on the number of Case Numbers issued in any month, only individual lenders and brokers know how many applications have actually been submitted by loan officers in any month. I was not aware lenders compile that information and submit it to HUD.

string(114) ""

Share your opinion