Reverse mortgage volume fell 7.2% in May after the market had some time to adapt to the April 1 moratorium on fixed rate standard reverse mortgages.
Volume fell to 5,352 loans, marking the month-over-month decline but still maintaining year to date volume 12% above its previous year total.
But volume observations aside, the market has marked a shift toward the adjustable rate reverse mortgage option in a proportion of roughly 95%, according to Reverse Market Insight.
“With two months of applications under our belts it appears that the immediate shift to [approximately] 95% ARMs from 70-75% fixed rates previously has held firm and will be with us for the foreseeable future,” RMI writes in a report published Monday.
Previous estimates placed the new volume mix at a lower proportion of adjustable rate loans, but the new balance has been accepted as a response to borrower preferences toward a larger amount of available funds versus an affinity for a fixed rate mortgage.
The Top-10 HUD-approved lender mix also showed some change with relative reverse mortgage newcomer Proficio ranking fifth for monthly volume at a total of 319 loans in May. The top five included Security One, Liberty Home Equity Solutions, Urban Financial Group and One Reverse Mortgage followed by Proficio.
Written by Elizabeth Ecker