Reverse Mortgage Volume Off to Sluggish Start in 2016

If the reverse mortgage industry is a car, the road following the Financial Assessment has been a hilly one shaped by various peaks and valleys. But although April 27, 2015 continues to fade farther away in the rear view mirror with each passing month, the resonant impact of FA continues to drag down industry volume even now at the start of 2016.

Home Equity Conversion Mortgage (HECM) endorsements fell 8.1% to 3,890 loans in January, following a small uptick in December, according to the latest industry data tracked by Reverse Market Insight (RMI). On a year-over-year basis, HECM endorsements were 21.4% lower in January 2016 compared to January 2015.

January’s endorsement total, which is the smallest single month tally over the past year, now puts FA impact at a 32.3% decline from volume’s most recent peak in August 2015, when endorsements were somewhat “artificially inflated” by a rush of borrowers seeking HECM case numbers ahead of the April 27 deadline, noted RMI.

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Compared to the previous month, endorsement declines were widespread and affected each region—all except for the Rocky Mountain area, which saw volume increase 6.6% to 241 loans.

The Northwest/Alaska region saw the biggest monthly decrease with endorsement volume dropping 17.4% to 190 loans; while the Southeast/Caribbean followed in close succession, falling 15.6% to 758 loans—though the region did rank second overall in terms of total unit count.

Near-unanimous declines were also prevalent among the industry’s top-10 lenders, only two of which bucked the trend to start off 2016.

Liberty Home Equity Solutions bounced back from a rather weak December when the company reported just 78 loans, to 291 loans in January.

For the second consecutive month, Home Point Financial Corporation grew its monthly volume, increasing from 71 units in November to 99 in December, to finally 110 loans in January.

In another notable mention, Synergy One Lending, Inc. cracked into the top-10 lenders this January, reporting 141 loans to start the year, despite the near 30% decrease from its December’s endorsement count of 200 units.

View RMI’s HECM Lenders January 2016 report.

Written by Jason Oliva