June Growth Snaps the Downward Spiral for Reverse Mortgage Volume

Reverse mortgage volume picked up some lost ground in June with endorsements rising 3.4% to 3,771 loans—finally putting an end to three consecutive months of declining volumes, according to the latest industry data tracked by Reverse Market Insight (RMI).

The slight increase in June is a welcoming reprieve from the trend of plummeting volume over the last several months, especially after endorsements tanked in May, dropping 14% to 3,646 loans—one of the lowest single-month totals in recent history.

“June was a nice little bump, but not close to recovering some of the recent declines,” RMI President John Lunde told RMD. “We have seen modest weakness in applications and case numbers issued for April and May, so I’d hesitate to call an end to the declines we’ve been seeing on the endorsement side quite yet.”

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While it remains to be seen if next month’s numbers will sustain this moderate growth, June was a productive month for the majority of top-10 regions and lenders tracked by RMI.

Eight of the 10 U.S. regions reported increases during the month, with only the Mid-Atlantic and New England reporting endorsement declines of 8.5% and 20%, respectively.

The Southwest saw the largest increase in its monthly volume, rebounding 14.2% to 459 endorsements in June, after suffering a nearly 20% monthly decline in May. The region was joined by the Rocky Mountain area, which reported 9% growth in volume, and the Great Plains, which reported 76 units in June, reflecting a 7% increase from the prior month.

June gains were more volatile among the top-10 industry lenders, with six companies growing their endorsements over May.

HighTechLending, Inc. saw a 52.9% bump in its volume in June with 159 loans, bringing the company’s trailing 12-month endorsement total to 1,073 units. Year-to-date, the company ranks ninth among all lenders with 618 units through June.

Synergy One Lending (doing business as Retirement Funding Solutions) boosted its endorsement volume 22% during the month to 183 units. This now brings the company’s year-to-date HECM volume to 941 total units thus far in 2016.

Ranking second year-to-date with 2,026 total HECM endorsements, Liberty Home Equity Solutions reported 272 units in June, a 20.9% monthly increase that propelled the company to the number three spot in the rankings.

To see where other lenders ranked through June 2016, view the Reverse Market Insight report.

Written by Jason Oliva

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  • While the total of 3,646 endorsements for May was clearly bad, are the 3,771 endorsements last month really all that much better? If we had twelve months of 3,771 endorsements, the total would be 45,252 endorsements, a miserable total. So how can we find much solace in the June endorsements even if they were higher than that of May?

    Finally an admission that recovery is still not in sight. Truly there is weakness in the March and April case numbers assigned. Yet while ignoring the case numbers for March (the base for July endorsements), RMI states: “We have seen modest weakness in applications and case numbers issued for April and May….” Since HUD has failed to post HECM case numbers assigned in May, it would have been nice if RMI would have provided that number since they comment on that total.

    Let us put a monthly total of 3,771 in perspective. It is the sixth lowest monthly total for any month of the last 131 months which is more than a decade of monthly endorsement totals. Yes, it is not the worst for this fiscal year but what solace is there in that? In the last eight years we have had 11,670 HECMs endorsed in a single month (April 2009). The April 2009 endorsement total was 3.1 times that of June, 2016.

    For those of us who have been following endorsements over the last seven years or so, we are now seeing the worst endorsement total for any calendar quarter since June 2005. This is the worst nine month total for any fiscal year in over a decade. Looking at the nine month total for the nine month period ended June 30, 2016, it is 12.6% worse than that same nine month period last fiscal year.

    How can we be excited at some lenders growing when looking at the fiscal year to date endorsement total of just 37,247 endorsements? With just three months to go in this fiscal year is it possible that we will not only see our worst fiscal year for endorsements in over a decade but will that total be less than 50,000 endorsements? Will endorsements have dropped by more than 12.6% by September 30, 2016, our fiscal year end for endorsements, when that total is compared to total fiscal year 2015 endorsements?

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