Finishing 2014 with a bang, December’s home equity conversion mortgage (HECM) endorsements grew 12.1% to 4,942 loans, marking the highest monthly volume since February, according to the latest report compiled by Reverse Market Insight.
“With the full year of 2014 now in the books, it looks almost decent with the exception of a nasty stretch from June to September that reflected the volume drops related to FHA’s Sept. 30, 2013 changes to the HECM program (primarily the initial cash limits to borrowers),” writes RMI co-founder and President John Lunde in his latest commentary.
In December, four of the ten regions around the country increased 28% or more in the month, with the Midwest leading the way at 31.8% and the Southeast/Caribbean, Southwest and Rocky Mountain regions following closely behind.
The boom for these regions in particular, Lunde tells RMD, can be attributed to home value appreciation.
“There has been a big gap in HECM endorsement activity around the country mostly due to differences in home value appreciation, which leads to better terms for new borrowers but also refi opportunities in some select areas,” he says. “Refi is always a small portion of any market’s volume, but can make the difference over the course of a few months or year. That said, the month to month noise in these numbers is less important than the longer term trends.”
For example, 8 of the 10 regions fit the picture of a bounce-back from either a decline or growth in November. The bigger picture, Lunde says, is more about the Pacific/Hawaii region staying flat with 2013 in a “down” year nationally, while the Southwest region in particular struggled — down -24.9%.
Looking back at December, lenders finished the year strong, as One Reverse hit its highest total of the year at 540 loans, while Reverse Mortgage Funding bounced back from a pause in November with 215 loans. American Advisors Group, on the other hand, has dominated the reverse mortgage industry, almost doubling its market share from 12.1% to 23.1%.
For the full RMI Report, click here.
Written by Emily StudyPrint Article