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.
“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.
Written by Jason Oliva