States See Big Reverse Mortgage Volume Growth in First Half of 2015

Endorsements for Home Equity Conversion Mortgages (HECMs) experienced a 24% boost in June as borrowers rushed to get applications ahead of the Financial Assessment’s late-April deadline—leading some states to achieve double-digit volume gains during the first half of the year, according to the latest analysis of industry data from Reverse Market Insight (RMI).

Thus far, year-to-date HECM endorsement volume in June is up 2.5% to 28,343 total units from where it was last year at this time. In 2014, year-to-date volume in June totaled 27,648 units, which represented a 14.1% decline from the comparable period in 2013.

“Pre-FA rush of borrowers is easily the biggest trend in June figures, which played out across the country,” said RMI President John Lunde.

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As the broader reverse mortgage industry experienced such modest growth, some states, like Florida and California, posted high gains during the first six months of 2015 compared to this same period last year.

In Florida, 2,471 loans reported year-to-date in June signals a 26.1% increase over last year’s pace—the highest growth among the top-10 states as tracked by RMI.

“For Florida, we saw the highest volume level so far this year and it was just 8% refinances, so it’s likely the housing market recovery there, along with the large number of eligible households setting the table for the pre-FA rush,” Lunde said.

Meanwhile, California also continued to improve on its pace, rising 12.9% year-to-date in June to a total of 5,320 units, a count that still leads the top-10 states.

“In California, we’ve seen quite a bit of refinance activity and that trend held in June endorsements as well: 25% were refinances in June, although that is right in line for prior months this year,” Lunde said.

Texas also posted substantial growth, seeing unit count rise 8.9% to 2,137 loans compared to last year’s pace.

View the RMI data.

Written by Jason Oliva

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  • 63 yrs old seniors have $2000 social security benefit, $1500 pension, no debt …. cannot qualify for reverse mortgage due to 50% equity requirement on $480,000 home value.
    FHA should help such seniors by reducing the requirement to 25%. The FHA allows a 3.5% down payment for first time home owner, FHA should help the same first time home owner who paid 25% value of the house. If a home is an investment, then reverse mortgage is an investment by both bank (75%) and homeowner (25% equity). Homeowner pay everything: insurance, tax, maintenance…. Bank pay nothing. Seniors do not have to sell the house and apply for housing.

    • It,

      Yeah and let us give all Social Security recipients a 25% increase along with it, but limit it only to those who are homeowners with homes worth a minimum of $400,000.

      FHA has already stripped billions from forward mortgage programs and $1.7 billion from the US Treasury just to keep the FHA insured reverse mortgage program afloat. What you suggest is not only financially irrational but what banks are you talking about? Name a major bank that offers these mortgages right now?

      If you can come up with a financial model that shows how your plan can be done at no risk of additional cost to the lender or to FHA/HUD on a national basis, you have to be the greatest financial mind to come into the mortgage industry, well,ever.

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