Reverse Mortgage Lenders ‘Swing Big’ as July Volume Slumps

Reverse mortgage volume dipped slightly in July, however, a few lenders reported big swings in their endorsement totals for the month, with one reporting a gain of nearly 50%, according to recent industry data.

Home Equity Conversion Mortgage (HECM) monthly endorsements fell 5% in July to 5,029 loans, says Reverse Market Insight in its HECM Lenders July 2015 report released Monday.

Four of the top-10 reverse mortgage lenders posted endorsement growth in July, with Urban Financial of America leading the pack, jumping 46.6% to 478 loans—the company’s highest level in over 12 months, according to RMI’s analysis.

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Reverse Mortgage Funding grew 25.5% to 251 loans in July, which RMI notes was just below their record April performance of 259 loans.

Meanwhile, RMS/Security One grew 13.4% to 389 loans during the month, while American Advisors Group saw HECM endorsements grow 4.6% to 1,256 loans. AAG continues to lead the top-10 lenders with 13,290 total loans in the 12 months trailing July.

Despite the overall volume decline, July still signals the second-highest endorsement level of the past 12 months—second only to June’s surge of 5,296 loans.

The high numbers for June and July are not seasonality so much as the surge of loans left over from before the Financial Assessment (FA) went into effect, RMI President John Lunde tells RMD.

“That might last another month, or we could see the declines from FA impact start as early as this month [August] for endorsements,” he said. “I suspect we’ll be back below 4,000 for at least one month in the next three months. But early indicators like applications, case numbers and counseling sessions all indicate the recovery in volumes started fairly quickly and should put us back to pre-FA levels well before year end on those early indicators, although maybe not fundings and endorsements.”

Several regions, including the Mid-Atlantic (601) and New England (232) led the way for endorsement growth during July, each reporting 18.3% and 13.2% more loans than the previous month, respectively. The only other region to post an increase in July was the Southeast/Caribbean, which was up 2.4% to 1,081 loans during the month.

The Rocky Mountain region, after posting an 86% growth in June with 329 loans compared to May’s 177, saw endorsement volume drop 20% in July to 263 loans.

Written by Jason Oliva