Reverse Mortgage Volume Up 4.9% in February, Unlikely to Last says RMI

Reverse mortgage volume was up 4.9% in February according to the latest data from the Department of Housing and Urban Development.

The 5,246 HECM loans endorsed were the highest in the last five months, but there are declines on the way according to Reverse Market Insight.

“Case numbers issued tumbled -4.9% to 5,795, for the first time breaking the lows reached in October 2009 after the first principal limit reduction,” said John Lunde, president of RMI.

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The last time case reached that level was in May of 2005, meaning the exit of Bank of America and Wells Fargo could be starting to have a big impact.

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“Needless to say we can’t expect endorsements to keep going up with case numbers issued headed down, so it looks like tough sledding on the endorsement side for the next couple months at least,” he said.

Six of the ten regions in February saw an increase in January, with New York and New Jersey seeing volume increase 31.5%.

First National Bank of Layton’s hit a new record high with 147 HECM loans endorsed, Genworth also had a strong showing with volume jumping 66.6% according to RMI.

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  • The loss of the two largest endorsement producers in the history of our industry was expected to make a huge dent in the endorsement total for this fiscal year and it has.  Yet this is not the only reason why the endorsement level was supposed to be lower.

    What is troubling is that the financial assessment underwrite was also part of the expected drop in endorsements during this fiscal year when I predicted 61,800 endorsements for this fiscal year, nine months ago.  The current 58,500 which is about 6% lower than the initial estimate does not reflect anything for the financial assessment underwrite as it is not expected to be implemented until after May 31, 2012

    So what is causing the continued drop in case number assignments?  No doubt it is in part a drop in qualified demand due to the continued loss in home values throughout the US.  

    BUT it is also caused in part by the awful effects of FIT.  

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