Reverse Mortgage Volume Drops 10% in March, Future Threats Loom

Endorsements for Home Equity Conversion Mortgages (HECMs) declined 10.6% in March from the prior month, however, bigger volume drops may be on the way, according to the latest report from Reverse Market Insight (RMI).

HECM endorsements totaled 4,618 loans in March, a 20.9% decline when compared to a year ago, which RMI notes is mainly due to March 2013 being the highest volume month for the industry since June 2011. 

But last month’s volume decline may not the biggest drop the industry will see in the near future, especially considering the impacts of recent HECM program changes that have already been implemented and more that are still to come, suggests RMI. 

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“For now, we’re expecting bigger drops in the next few months given where application and funding volumes have been since 9/30/13 HECM guideline changes,” RMI notes. “Of course, we still have the financial assessment ahead of us as well so the rest of the year looks challenging for HECM volume.”

Geographically, nine of the 10 regions nationwide reported volume declines with the Southeast/Caribbean as the only exception, having posted 3.1% endorsement growth in March compared to the previous month.

As for the top 10 lenders, only four reported increased volume in March. 

Liberty Home Equity Solutions showed the biggest gain, rising 15.5% to top all of the lenders for the month in terms of volume growth.

Others to buck the national trend of volume declines included One Reverse Mortgage, American Advisors Group, and Urban Financial of America—each having reported 13.7%, 4.6% and 4.2% growth, respectively. 

View the RMI report.

Written by Jason Oliva

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  • I know it looks like loom and gloom but hang in there. The reverse mortgage is still the best program going for seniors who want to improve their quality of life.

    Sure, there are more changes coming like the FA ruling. This only confirms what I have been saying, we have to look at the reverse mortgage as NOT only a need based program!

    We must go after new markets, go after those with seniors with lower debt on their property, call on small banks, credit unions and any profession that has a data base of seniors. Get exposed, do like we used to do, hold educational work shops (Seminars). Team up with your municipalities, put together joint workshops with Elder Law Attorneys and financial planners. This works, team up with people that have senior clients who trust them. In return, when seniors are sent to you by these professionals, they will trust you as well.

    There is a light at the end of the tunnel, you only need to believe and go after it!

    John A. Smaldone

    • Optimism is a poor replacement for gloom. Reality: affluent, financial stable people don’t do reverse mortgages in general. Most people who do a reverse mortgage have some need for the funds. Even when you team up with attorneys, CPAs, etc., the clients/borrowers they normally send to you, and I have received many such referrals, are people who need the Reverse Mortgage in one way or another.
      I would love to hear about the many people who don’t need the money, but are standing in line for the RM.

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