Reverse Mortgage Retail Outpaces Wholesale to Start 2015

Home Equity Conversion Mortgage (HECM) originators began 2015 on an even keel, sustaining endorsement volumes in January after ending the prior year with a spike, according to the latest Reverse Market Insight (RMI) report. Retail outpaced wholesale to end the year, contributing to an overall 12.1% increase in HECM endorsements between November and December, RMI notes.

And though the upcoming financial assessment is likely to lead to a volume shift, that shift will likely not be realized until several months following the new rule’s implementation, says RMI President John Lunde. 

“I don’t expect FA to impact endorsement numbers until the second half of the year, probably even into August or September,” Lunde wrote in an email to RMD.


Overall, HECM endorsement volume was relatively flat (-0.1%) between December and January. Retail gained slightly from the previous month (+0.2%), while wholesale contracted (-0.5%). 

The period from December to January saw the smallest month-to-month change in endorsement volume in the trailing 12-month period, the latest RMI report indicated. 

Some lenders bucked the overall trend with dramatic volume increases in January, however. 

RMS/Security One Lending’s total retail and wholesale endorsement volume increased 26%, making January its highest volume month since February 2014.

Urban Financial of America also experienced strong volume growth of 15%, from 561 endorsements to 646. And the 1st Reverse team at Cherry Creek Mortgage Co. grew total volume by 10% month-to-month.

American Advisors Group continued to lead the pack for total volume, posting 1,288 January endorsements, representing 2.5% growth from the prior month.

View the RMI report.

Written by Tim Mullaney

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  • Yeah, but we already have endorsement numbers from February and while the first quarter of fiscal 2015 ended up with over 1,000 more endorsements than the first quarter of fiscal 2014, the following 2 months have brought that difference much closer to 500. If this trend continues and despite the expected impact of financial assessment on September endorsement numbers, fiscal 2015 could end in a significant loss when coming total fiscal year endorsements for 2015 versus 2014. That would make fiscal year 2015 endorsements the worst fiscal year endorsement count in a decade. In fact each fiscal year endorsement count for the last five years would be worse than fiscal 2005.

    Some are saying how great February was for the industry in closed HECMs but that increase (if true) will not show up in our endorsement count until perhaps May but more likely June. We heard the same kind of rumors during last summer and yet the endorsement count has not improved.

    Sometimes one wonders if what we hear is not closings but rather submissions. although we know how many turned into case number assignments and endorsements, no one knows how many applications are actually submitted to lenders.

    The good news is that we are in the sixth month of this fiscal year and our year-to-date endorsement count as of February 28, 2015 is still ahead of what it was last fiscal year.

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