Surging June Snaps Four-Month Reverse Mortgage Volume Decline

Just when Home Equity Conversion Mortgage (HECM) endorsements were spiraling down a four-month volume decline, June bucked the trend with a near 24% increase in production, according to the most recent industry data from Reverse Market Insight (RMI).

Although overall volumes are still a bit low compared to the 5,296 loans recorded in the trailing 12 months as of June, the month’s 23.9% growth in HECM endorsements is at its highest level since August 2013—before initial utilization restrictions limited disbursement to 60% of the principal limit during the first year of the loan.

But as other changes, notably the Financial Assessment, have yet to fully impact reverse mortgage volume, June’s production is a sign that there is still some time before endorsements begin to feel adverse side effects.


“Judging by the application and funding volumes we’re seeing from lenders through our industry data repository, it looks like we might have two more solid months of endorsement volume before the significant declines from financial assessment implementation drag volumes down again,” writes RMI in its newsletter on the June data.

June’s production was driven by unanimous growth among all 10 regions of the country tracked by RMI, with the Southwest leading the way as it reported 243 loans, a 55.1% increase from the previous month.

In terms of the highest growth rate, the Rocky Mountain region saw HECM endorsements grow 85.9% to 329 loans in June, while the Great Plains followed with 151 loans, up 75.6%.

Among the top-10 lenders, the growth story was nearly identical with United Northern Mortgage Bankers Ltd., which ranked in the number 10 spot, posting the only decline during the month with 52 loans, down from 74 in May.

Home Point FInancial (formerly known as Maverick Funding) saw the biggest increase in HECM endorsements during the month, growing 55.2% to 149 loans.

View the RMI data

Written by Jason Oliva

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  • Some have been saying that the recent decline was due to the all of the changes catching up to us and then something like this happens. It is still unclear why we are seeing current trends. This month was yet another example of the erratic nature of recent monthly endorsement numbers. RMI is right that we should have two reasonably good months for endorsements ahead (or at least good for last year and this). Based on the case number assignment date on applications to which financial assessment apply (4/27/2015), the first month when we should expect to see substantially lower endorsement numbers is September.

    It could be that since most of the endorsements this month come from case numbers assigned in February 2015 (assumed), could it be that they went up because some borrowers wanted to get a jump on the deadline to get a HECM without financial assessment?

    If we get another couple of months of endorsements of this magnitude there is now a strong possibility that our endorsement numbers for this fiscal year could be larger than last. But there is good reason to believe that fiscal 2016 endorsements will be worse than those for either fiscal 2014 or 2015 with the first appearance of financial assessment in our endorsement numbers coming two months from now.

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