New Indicators Point to Reverse Mortgage Upswing

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

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  • Even if the result is 800 more endorsements four months from now, that will be five months into the new year and will result in less than 4,600 endorsements for February.  Even if that were the average rate for endorsements during this fiscal year, total endorsements would be less than 1,000 more endorsements than last fiscal year.  

    But what if the increase is but a fluke?   The sad thing to read is that this is viewed as a significant improvement.  This is not a trend but could be if such improvement continues for more than three months in a row.  Will endorsements be better this fiscal year over last?  That is for someone above my pay grade to determine.  

  • If the CFPB or some other federal agency doesn’t act to fix the appraisal business, I think the reverse mortgage volume will continue to suffer. When the government created the AMC system, it drove all of the qualified appraisers out of the business, added substantial cost to the borrower, lowered the appraised value of borrower’s homes and added at least a week to the processing time of a reverse mortgage loan. Another great example of the law of unintended consequences.

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