Reverse Mortgage Volume Trending 2013 Levels, But Don’t Hold Your Breath

Home Equity Conversion Mortgage (HECM) endorsements fell 7.3% in October compared to the previous month, bringing yet another month of declining loan counts. But as estimates point toward a higher full-year tally than 2014, volume over the past few months has been trending closely to the last time the industry exceeded 60,000 units, according to the latest reverse mortgage market data.

Year-to-date, HECM endorsements through October have hit 48,114 total units, an increase of 10.3% from the comparable period last year, according to Reverse Market Insight data released Tuesday.

October, whose single month total was 4,332 units, represents the second consecutive month since August where volume has fallen—and a near mirror image of how volume was trending during this same three-month period in 2013.
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Comparing August to October volume between 2013 and 2015, endorsement counts trended in a similar direction, though this year’s monthly totals overshadowed 2013’s numbers.

As past RMI data has reported, August 2013 volume reached 5,382 compared to 5,750 in 2015; September 2013 volume was 4,257 units compared with 4,671 in 2015; and October 2013’s volume of 4,188 was slightly lower than 2015’s monthly total of 4,332 units.

The trend, however, ends with November’s endorsement total of 4,023 loans, which is 14% lower than the 4,690 units reported in November 2013.

Despite the similarities between Aug.-Oct. over the past two years, year-to-date (YTD) volume in 2013 through October (52,209) is still substantially higher than this year’s 48,114 units. Additionally, the industry finished 2013 with 60,929 total units, the highest level seen since 2011’s total of 68,694.

But with just one month of estimation left in 2015, RMI suggests that full-year volume is trending toward 56,000 HECM endorsements.

“That would put this year just about the midpoint of the past two years, which matches pretty close to the way it felt living through all three,” RMI stated. “Here’s to ending a year for the first time in recent memory without anticipating another shoe falling for the industry!”

Written by Jason Oliva

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  • For the 13 days before the date of the RMI report, it has been known that the total endorsements for November 2015 were lower than either November 2013 or November 2014 at 4,023 endorsements per the HUD report.

    With August 2015 Case Number Assignments at just 6,089 and the conversion rate hovering right around 58.5%, endorsements for December 2015 will most likely be less than either December 2014 (4,410 endorsements) and December 2013 (4,690 endorsements). It could even be marginally lower than 4,000 endorsements for December 2015.

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