Reverse Mortgage Volume Still Beats Expectations Despite November Dip

Endorsements for Home Equity Conversion Mortgages (HECMs) continued their downward trajectory in November, however, volume remains slightly above past expectations, at least for now.

HECM endorsements dropped 7.1% in November to 4,023 units, defying predictions that volume would dip below 4,000 units per month as a result of the Financial Assessment, according to the latest industry data tracked by Reverse Market Insight.

Through November, total endorsements for 2015 stand at 52,204 units.    Of this amount, 36,212 units represent the top-10 industry lenders subtotal.

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Despite the third consecutive month of declining volume, November was productive for a few of the industry’s top lenders who saw endorsement counts increase.

Live Well Financial saw the biggest jump in endorsements for November, rising 53.8% to 203 units. With November’s numbers, that brings Live Well’s total count for 2015 to 1,798 units. Through November, the company holds the seventh spot among the top-10 lenders.

Ranking third, Reverse Mortgage Solutions/Security 1 Lending also had a good month as it saw volume increase 13.5% to 320 units—a level higher than both the company’s September and October tallies. Through November, RMS/S1L totals 4,139 units.

One Reverse Mortgage was the only other lender among the top-10 to report an increase in endorsements during the month, rising 12.9% to 358 units and holding down the second ranked spot under American Advisors Group, which posted 1,022 units—just 6.4% lower than its previous month’s total.

Geographically, just three regions reported increases in volume for November: Southwest (18.2%), Great Plains (16.2%) and Southeast/Caribbean (3.8%).

View the Reverse Market Insight report to see where other lenders stacked up for volume in November.

Written by Jason Oliva

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  • There may have been some who have claimed that endorsements would be less than 4,000 on average per month but right now based on current numbers, we are headed for an approximate 14% drop in total fiscal year endorsements from the total for fiscal 2015.

    If case number assignments (CNAs) average 7,000 during the 10 month period ended May 31, 2016 and using the current conversion rate of 58%, we will see about 49,000 endorsements this fiscal year. It is hard to imagine that endorsements for fiscal 2016 will reach 52,000 but it is also hard to believe that they will be less than 48,000 unless the kind of extraordinary efforts Reza discussed at the NRMLA convention are fully executed industrywide before mid January 2016.

    Although rarely discussed, it is the conversion rate that could potentially have a huge impact on future endorsements and as long as it continues trending downward, fewer CNAs will materialize into endorsements.

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