RMD Wants Your Reverse Mortgage Predictions for 2014

How is the reverse mortgage business shaping up this year? We’re seeking input from our readers as to where they see the industry headed in 2014.

The past year brought a slew of substantial program changes including principal limit reductions and upfront limitations on loan proceeds. Borrowers began to shift away from a strong fixed-rate majority seen in recent years, and several major acquisitions took place.

What do you predict will set the market apart in 2014? 

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If you’re interested in sharing your outlook, please email us with responses to the following questions totaling no more than 200 words:

  • How do you see reverse mortgage market shifting in 2014 and where will the biggest changes be felt versus 2013? Why?
  • Will loan volume be on pace with, behind, or ahead of where it was in 2013?
  • Have another prediction about the coming year for the reverse mortgage market? Tell us what you think.

Email your name, company, title and predictions to editor@reversemortgagedaily.com. Submission deadline is end of day Friday, January 24.

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  • 2014 is the Year in Transition.

    HECM endorsement volume will shrink to below 50,000. The conversion rate will suffer some especially after financial assessment is implemented. While endorsement volume will drop by at least 20%, UPBs will be down over 35%. As a result, lenders and originators will experience lower revenues in 2014 than 2013. Yet some individual lenders and TPOs will experience endorsement growth as they increase their market share.

    The practical use of a HECM as a loan of last resort will go down. Lender consolidation and abandonment of the market are still possible but will not be of the magnitude we have seen in the last three years.

    Marketing will be more targeted and directed. The Extreme Summit will survive but will not be as successful as needed to drive annual endorsements to 300,000 by 2018.

    There will be more positive articles on the use of HECMs. We will hear less about a negative net position for HECMs in the MMI Fund due to the transfer of over $8.2 billion from other sources into the HECM portion of the MMI Fund over the last four fiscal years. Thus HUD will not feel the sting from HECM losses in 2014 that it felt in 2013.

    As problems in the growth of forward mortgages persist, we will see growth in TPOs from smaller banks, credit unions, and other similar businesses. The top ten lenders will experience some shifting and volatility.

    We will see growth in H4P endorsements but their numbers will remain disappointingly low. Lenders will continue to meander when it comes to reaching out to financial advisers even though they will have increased their efforts substantially. Financial assessment will be a very difficult change to successfully adjust to.

    Yes, 2014 will be the Year in Transition.

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