New Reverse Mortgage Originations Top $12 Billion Through Q3 2015

Reverse mortgage lenders funded $12.3 billion of new Home Equity Conversion Mortgages (HECMs) during the first nine months of 2015, according to a recent analysis of Federal Housing Administration (FHA) data.

The origination volume throughout the first three quarters of 2015 represents a 22.2% increase from the same period in the prior year, according to findings from the Inside FHA/VA Lending analysis from Inside Mortgage Finance (IMF).

HECM endorsements also rose 17.3% to $4.5 billion dying the third quarter, up from $3.9 billion in the previous quarter—marking the second highest HECM endorsements have been since the second quarter of 2013, when they totaled $4.1 billion, per IMF’s evaluation..

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“The volume increase is attributable to program changes implemented by the Department of Housing and Urban Development in the past two fiscal years to reduce risk to borrowers and to the Mutual Mortgage Insurance Fund,” IMF noted.

Fixed-rate HECMs accounted for only 14.8% of new HECM transactions, signaling a majority preference among borrowers for adjustable-rate reverse mortgages.

Written by Jason Oliva

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  • The 3rd quarter endorsements reflected the surge in applications ahead of the implementation of financial assessment.

    It will be more interesting to see what the endorsement numbers look like for Q4 2015 and Q1 2016.

    • REVGUYJIM,

      Actual endorsements for Q3 2015 were 15,450 and for Q4 2015 they were 12,588. As we are still in the first part of January 2016, it will be interesting to see what endorsements look like for this and the next two months.

      What the amounts funded actually are is not available from FHA production reports. FHA does provide the CMAs on the amounts endorsed in those reports.

  • For clarity’s sake, the amounts shown as funded above are simply the total of the Maximum Claim Amounts on the related HECMs endorsed during the indicated periods. The amounts do not reflect the actual amounts funded at closing.

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