Reverse mortgage counseling sessions showed a sharp increase in October, up 21% from September and marking a positive indicator among several months of bad news for reverse mortgage volume, according to data from Ibis Software, which compiles counseling information nationally.
The rise in counseling sessions could mean an uptick in applications will follow, says Jerry Wagner, president of Ibis.
“Based on the number of applications, which has been holding fairly steady, applications should be up 21% [in October],” he says.
Reverse mortgage volume fell substantially in Setember to 3,706 loans—a 10.1% decline from August and marking one of the lowest months for endorsements in recent memory. A slight, 1.1% increase in October showed an uptick, although many feel the number was artificially low due to the implementation of the new HERMIT software used by HUD to process reverse mortgages, as well as the impact of Hurricane Sandy.
Sandy, too, may have caused a drag on reverse mortgage counseling sessions as some agencies closed their offices due to the storm’s impact.
While the conclusion that applications will certainly follow recorded reverse mortgage counseling sessions is not a certainty, says John Lunde, president of Reverse Market Insight, it would signal a rebound from the lower levels of activity in September and October, if it does come to fruition.
“September was significantly lower than the prior few months trend, so a 21% rise would put it back on track, if that’s what we end up seeing in case numbers issued,” Lunde says.
Written by Elizabeth Ecker