HECM endorsement volume hit a low point in August, declining -20.4% to 3,256 loans, as all 10 U.S. regions experienced declines from July, according to the latest data compiled by Reverse Market Insight (RMI).
“HECM endorsements for August underlined the dog days of summer,” RMI President John K. Lunde writes in his analysis. “Applications and funding have turned the corner back up toward growth already so this is probably the low point for endorsements following last September’s principal limit factor reductions, but it’s not out of the question to bump along the bottom for another month.”
However, the Department of Housing and Urban Development’s endorsement data lags actual closing counts by up to 60 days and sometimes more, meaning that there are often discrepancies between endorsement data and closed loan data.
Recent reports actually indicate the market is on the upswing. Following new changes to principle limit factors for reverse mortgages and policies regarding non-borrowing spouses, which went into effect Aug. 4, lenders are reporting a surge in applications as a result.
Still, in August, endorsements in the smallest region — the Great Plains — took the biggest hit, dropping a sharp -44.5%, while the Mid-Atlantic weathered the storm best with just a -3.3% decline.
Despite the overall slump, Proficio Mortgage squeezed out an increase, rising 15.4% to 135 loans in August, up from 117 a month prior, but still below last September’s 162. One Reverse Mortgage also continued its consistent monthly performances with a 5.4% increase to 392 loans from 372 in July, but also less than its 452 endorsements in September 2013. The other top-10 lenders experienced declines in their endorsement volume.
Overall, the industry’s total HECM endorsements fell to 3,256 in August from 4,092 in July and 4,527 last September.
Read the RMI report here.
Written by Emily Study