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..
“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