Endorsement volume for Home Equity Conversion Mortgages (HECMs) fell off a cliff in August to a new two-year low, but while activity continues to drag in 2014 thus far, some metros have experienced an uptick in performance, according to the latest HECM Trends report from Reverse Market Insight (RMI).
Year-to-date, HECM endorsements are down 19.2% through August (34,989) compared to where they were during the same month in 2013 (43,318).
Loan counts are down in many places, as well as average initial balances, due to initial utilization restrictions, RMI noted. However, certain areas have been able to weather the storm, most notably Florida, which witnessed growing maximum claim amounts (MCA) as of late.
Port Saint Luce topped the list of cities with growing loan sizes, rising $61,000 over last year to $174,000 on the average loan in August. It was joined by fellow Floridian city Boynton Beach, which ranked third with a $52,000 gain to $274,000.
Separating the two metros was California’s Mission Viejo, which saw $52,000 growth as well to an MCA of $543,000—the largest among the top-10 cities for average MCA growth compiled by RMI.
Though Florida shined brightly for average MCA growth, when it came to geography rank by total MCA growth, Arizona was king, commanding four spots among the top-10 cities (Phoenix, Mesa, Sun City West, Tucson).
As for the top-10 lenders, the rankings as of August remained largely unchanged from July, with the exception of a jostle in position between Net Equity Financial and Associated Mortgage Bankers, who swapped places between the #8 and #9 spots, respectively.
View the HECM Trends August 2014 report.
Written by Jason Oliva