March Reverse Mortgage Volume Dips 1% as Industry Strives for Comeback

Following a more than 17% gain in volume during February, Home Equity Conversion Mortgage endorsements dipped a mere 1% in March as lenders continue to play “catch-up” on volume from previous months, new industry data suggests.

HECM endorsements totaled 4,535 loans in March, down from February’s rebound of 4,579 units, according to the latest data released by Reverse Market Insight (RMI). Despite the modest monthly decline, March’s volume represents the third-highest endorsement count for a single month since September 2015, which reported 4,671 loans.

Only four of the top-10 regions tracked by RMI reported endorsement increases in March, however, RMI notes there was significant divergence among these regions compared to year-ago figures.

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The Mid-Atlantic led the way on a monthly basis, reporting a growth of 27.6% in March to 370 loans. This brings the region’s 2016 three-month total to 981 units, down 31.3% from the comparable period in 2015, when the region reported 1,427 units.

Also reporting strong growth in March, the Midwest grew 13.2% with 411 loans during the month. Compared to last year, the region’s volume is 6.6% lower than its March 2015 total, and 19.1% lower on a first-three-months basis compared to 2015.

The only three regions to post year-to-date growth during the first three months of 2016 compared to last year were all located in the West, with the Northwest/Alaska at the head of the pack.¬†With 744 loans year-to-date in 2016, volume in Northwest/Alaska is currently 17.7% higher than last year’s comparable period total of 632 loans.

Rocky Mountain region followed closely behind, with a 17.6% growth in its year-to-date production of 802 loans, up from 682 loans reported during this time last year.

Lastly, the nation’s largest producer in terms of unit count, the Pacific/Hawaii, reported 3,703 units year-to-date in 2016, a 6% increase compared to the 3,495 units the region reported for the first three months of 2015.

As for industry leaders, half of the top-10 lenders reported monthly volume gains during March.

Live Well Financial more than doubled its monthly volume, reporting 270 loans in March, up from 130 in February. The increase brings Live Well’s year-to-date endorsement total to 550 units, which is 32.2% higher than last year.

Reverse Mortgage Funding grew 19.5% to 227 loans in March. Year-to-date, the company’s volume is 16.5% higher compared to last year.

Taking the tenth spot among lenders, High Tech Lending reported 114 loans in March, an increase of 18.8% from the previous month. So far, the company totals 265 HECM endorsements in 2016, up 52.2% compared to 174 loans recorded year-to-date 2015.

American Advisors Group, the industry’s largest lender by volume, grew 8.9% in March with 999 loans. Year-to-date, the company’s total endorsement count (2,742) is down 22% compared to the 3,506 loans it reported during the first three months of 2015.

The only other lender among the top-10 to report an increase in March, Synergy One Lending was up 7.8% with 166 endorsements.

View the HECM endorsement data for March 2016 to see where other lenders ranked for volume.

Written by Jason Oliva

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  • What the 1% loss of March means is that we are not seeing a recovery in endorsements. One of the most recognized and acknowledged leaders in HECM analytics outside of HUD told RMD both in August of last year and again in early March that he is seeing signs of recovery. Yet a one month improvement in endorsements (February) does not make a trend or recovery.

    In the six months ended 3/31/2016, our volume is so weak that February’s endorsement total is the highest monthly total so far this fiscal year. Total endorsements for the first six months of this fiscal year are less than 25,600 which is the worst such total in over a decade by about 8.5%.

    Worse, we could experience endorsement losses this month of about 13% from that of February and next month of almost 25% from that of February based on case number assignments for December and January. March proved to be much better than expected but still there was no growth leading to a positive trend, just a small loss in endorsements.

    We now have about three months to raise sufficient applications with case numbers assigned to help improve the fiscal year endorsement situation. We will see if endorsement improvement and recovery is making any headway in the next six months. So far we are not close.

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