Most Top-10 Lenders See Reverse Mortgage Slump Near Year’s End

Following notable home equity conversion mortgage (HECM) endorsement growth in October 2014, nine out of the top-10 reverse mortgage lenders experienced a decline in volume in November, according to the latest Reverse Market Insight (RMI) report

“The industry was down overall in the month, so it makes sense that many lenders would be down as well,” RMI President John K. Lunde tells RMD. “Among the top 10, nine had seen big jumps in October (with the exception of Liberty), so it makes sense they reverted to the mean a bit.”

However, Live Well Financial bucked the trend, growing 20.9% to 168 loans in November, compared to 139 in October.

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Among the top-10 lenders by year-to-date loan volume are American Advisors Group; Liberty Home Equity Solutions; RMS/Security 1 Lending; Urban Financial of America; One Reverse Mortgage; Generation Mortgage; Proficio Mortgage; Reverse Mortgage Funding; Live Well Financial; and Cherry Creek Mortgage. 

But some hovering below the top 10 saw volume spike in November, including High Tech Lending, which grew 116.7% to 78 loans on the month, putting the company in sight of last year’s endorsement total, Lunde writes in his commentary

Overall, HECM endorsements declined modestly in November, split almost evenly across business channels. Retail originations declined slightly more, down -9.8%, than wholesale/broker volumes at -8.2%.

Access the RMI report here

Written by Emily Study

 

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  • More important than the drop in the number of endorsed units is the loss in revenues at initial funding per HECM endorsed which as a percentage is multiple times the percentage loss in units. What lender has found a way around the per HECM revenue loss at initial funding?

    There is little question that the September 30, 2013 changes have devastated the value of origination operations, particularly the loss in principal limit factors making today’s HECM little more than a modified Saver. While the market exists and is viable, it has taken a hit, a huge hit which when combined with the loss in endorsed units from financial assessment makes the outlook for fiscal 2016 (yes, next fiscal year) bleak, if you buy into the idea that financial assessment will decrease business by over 10%.

    The one bright spot is the expected growth in tails that the September 30, 2013 changes created.

    • Raymond,

      Perhaps you overlooked the part where John said that November’s increase just put “the company in sight of last year’s endorsement total.” I’m sure Don wished his volume was up 116.7% for the year to date. Unfortunately one month a year does not make.

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