Reverse Mortgage Volume Jump Exceeds Expectation

Total home equity conversion mortgage (HECM) endorsement growth saw a big jump in October, the latest Reverse Market Insight (RMI) report shows.

October rebounded to 4,852 loans, up 29% to the highest level since February.

“We’ve seen applications trending upward for several months now and fundings for the last few so we’ve been expecting an increase in endorsements,” Reverse Market Insight President John Lunde tells RMD. “October was a little more of a jump than expected, but that’s probably due to timing of endorsements more than anything else.”


Many lenders and regions were big winners in October, data show. RMS/Security One Lending activity more than doubled from September, up 107% to 454 loans and the highest total for the company since February. In addition, Reverse Mortgage Funding continues to climb the charts, up 80% to 220 loans and breaking into the top 10 on a trailing twelve months basis.

The east coast saw particular strength and the top three percentage increase among RMI’s 10 regions tracked.

New York/New Jersey were up 41.6% to 470 loans; New England was up 38.9% to 232 loans; and the Mid-Atlantic was up 37.9% to 582 loans.

Looking ahead, Lunde expects to see a little more than 50,000 endorsements for the calendar year in total, and somewhere in the 3,500 to 4,000 range per month for November and December.

View the latest Reverse Market Insight data. 

Written by Cassandra Dowell

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  • While the headline reads oh so optimistically, it is in all practical respects little more than a red herring. First there are no voices in our industry who have predicted or predict in this or any other media with at least 1,000 members or readers what monthly HECM endorsements have been or will be.

    On August 18th in a post on this website (, one of the executives at the largest reverse mortgage software vendors stated that he saw much better numbers in reverse mortgages than generally believed. But it seems his view was very prejudiced by what he saw within the prior two weeks in case number assignment data entered into his software base.

    John Lunde in line with the propaganda of optimism in the industry claims: “We’ve seen applications trending upward for several months now and fundings for the last few so we’ve been expecting an increase in endorsements.” Yet just looking at the latest report HUD publishes on HECM case number assignments for the twenty-two consecutive months ended August 2014, with the exception of case numbers assigned in August 2014, case numbers assigned since April have been trending downward.

    August 2014 case number assignments were unusually high due to the delay in many prospects moving forward to get a case number assigned since the announced increase in principal limit factors (“PLFs”) going into effect for all applications with case numbers assigned after August 3rd, 2014. Many of these applications were complete and the related applicants had counseling certificates but the applicants wanted to wait to file for a case number on August 4th, 2014 so that could obtain the higher PLFs.

    Since there is a relatively new anecdote in the industry that many HECMs receive endorsement within two months of the related application receiving a case number assignment, it is no surprise to see an increase of 1,100 endorsements over the prior month following a total of over 11,413 case number assignments for August 2014, when the prior ten months of case number assignments averaged just under 5,600 HECM case numbers assigned per month.

    This idea that we are seeing a rising trend in any meaningful way is nothing more than the continuing optimistic nonsense we have been hearing since fiscal 2009. Yes, endorsements will be up for the next few months over the endorsement numbers we experienced during the summer but will they be up on a month to month basis over what we saw last year at the same times?

    So the question becomes are we so desperate for good news, we distort information? As of yet there is absolutely no empirical and verifiable evidence which leads one to the conclusion that fiscal year 2015 endorsements will be better than those for fiscal year 2014.

  • I think we have to give the Extreme Summit some of the credit. They have been marketing our product and it has been some what of a motivating factor.

    Advertising has stepped up, Fred Thompson is on TV a lot these days and I think seniors are responding to receiving the information about the HECM.

    We also should keep in mind that income averages are down nationwide and social security income has not been keeping pace enough for seniors to live on.

    However, we have a lot of potential out there, we need to capitalize on our opportunities but also keep in mind we need to be patient with our seniors and help them in every way we can.

    John A. Smaldone

    • John,

      What do former Senator Thompson ads have to do with the Extreme Summit? If things keep going the way they are, the Extreme Summit may be like the predicted explosion of jumbo reverse mortgage originations which was being touted as outstripping HECM endorsements by 4 to 5 times by 2010; the explosion never occurred and by its recent results, neither will the 300,000 endorsement for fiscal 2018 through the Extreme Summit. Like the predicted reverse mortgage jumbo explosion, the Extreme Summit will be remembered more as a bold idea than a well thought out and managed campaign.

      In late 2010 when there were convention cries that we would see 100,000 endorsements by the end of fiscal 2011, the previous fiscal year had just closed with less than 80,000 endorsements. In the last four fiscal years, the industry would have loved to see anything close to 80,000 endorsements for any fiscal year. Instead we saw 73,000 for fiscal 2011, 55,000 for fiscal 2012, 60,000 for fiscal 2013, and for last fiscal year just 52,000. The average is just 60,000 per year; hardly the 100,000 that was being touted just four years ago. Another way to look at 300,000 endorsements in fiscal 2018 is to realize that in four years we have seen about 240,000 endorsements in total. No one is predicting 100,000 endorsements for 2015 and 2016 so far looks to be about the same. So where will these 300,000 come from?

      When the idea of turning to financial advisors first began to resonate within the industry an industry sage warned that relying on financial advisors would help increase volume but not nearly to the extent being touted. Certainly HECMs for Purchase are unlikely to produce the volume needed to get us to 300,000 endorsements during fiscal 2018.

      So again where will the volume be coming from? I would love to know how this was reasoned to be possible. Predictions based primarily on emotion have about as much likelihood to turn into fact as guesses. While I wish for such results, the goal seems to have been more developed through one-upmanship than any significant attempt at analysis.

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