Reverse Mortgage Volume Jumps 24% in August, But Hold the Applause

Reverse mortgage volume saw a big jump in endorsements during August, a welcoming increase after what has been a dismal summer for industry production, according to recent market data.

Home Equity Conversion Mortgage (HECM) endorsements rose 24.1% in August to 4,387 loans, reports the latest industry data tracked by Reverse Market Insight (RMI). The month marks the first time endorsement volume has surpassed 4,000 units since April (4,243).

All 10 regions tracked by RMI reported endorsement growth, with the Rocky Mountain region leading the way with a 54.8% gain in August of 356 loans. Only one region, New York/New Jersey, reported a single-digit increase, though volume in the area grew 9.4% with 290 units in August.


The Pacific/Hawaii, which remained the top region by volume, saw endorsements rise 21.6% to 1,210 loans. The region was followed by the Southeast/Caribbean, which reported 863 loans to rank second among all regions, signaling a 24.2% monthly increase from July.

While the August lift in endorsements is a welcoming sight for the reverse mortgage market, where 2016 volumes have largely dulled in comparison to recent years, industry data suggests future turbulence may be in store as the rest of the year unfolds.

“It was great to see the improvement in volume, but recent application trends don’t make me think we’re headed for a sustained period of steady growth, unfortunately,” RMI President John Lunde told RMD.

Among the top-10 industry lenders, seven posted higher volumes in August compared to the previous month.

In terms of growth, Reverse Mortgage Funding led the way with a 74.2% increase to bring its August endorsement volume to 460 loans. The company ranks sixth among the top-10 lenders by volume during the 12 months trailing August 2016.

Finance of America Reverse also had a big August, seeing its monthly production grow 73.8% with 518 loans, up from 298 units during the previous month. In the 12 months trailing August, FAR ranks second among all lenders in terms of unit count with 3,936 loans, behind only American Advisors Group, whose 12-month trailing total is 11,532 loans. AAG’s single month volume for August dropped 2.6% to 850 loans, down from 873 in July.

HighTechLending also rebounded in a big way in August. The company’s 137 loans during the month were 71.3% higher than its July tally of just 80 loans—a total that was nearly 50% lower than its June volume of 159 units. Through the 12 months trailing August, HighTechLending ranks ninth among lenders with 1,113 total loans.

On a year-to-date basis, Nationwide Equities Corp. rounds out the top-10 lenders with a total 735 loans through August. This represents an increase of 174% compared to the company’s year-ago volume through the first eight months of 2015.

See where other reverse mortgage industry lenders ranked through August 2016.

Written by Jason Oliva

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  • The news that Jason brings to us in his article is very good and should give industry players a boost of energy.

    I realize the industry data and John Lunde suggests future turbulence may be in store for us for the rest of the year.

    However, It does not have to be that way necessarily. School is back in session, most seniors are back home from their summer visits to the grandchildren and all the professionals like financial planners are back from vacations and working!

    What I think I am getting at is we may have to work a bit harder but the business is out their if we will aggressively go after it! Let us all fool the experts, what do you say?

    John A. Smaldone

    • John,

      You are a terrific industry booster but this mild rise (in absolute numbers) was generally anticipated by those of us who track case number assignments. But what the optimists in the industry fail to report is that the total endorsements for last month were 23.4% lower than the total endorsements for the month of August 2015. Being a realist means not caring about finding the encouraging word but rather relevant facts.

      In 17 days, this fiscal year will come to an end. In the last 30 days of this fiscal year there really is not much that members of this industry can do or could have done to change the outcome of the endorsement count for fiscal 2016. Unfortunately that outcome looks to be the very worst annual total endorsements for any fiscal year since 2005 and even more telling will be that the total will not even reach 50,000 endorsements.

      None of this was unexpected unless you look at lender comments about the impact of financial assessment. It seemed as if the greatest number of rank and file originators believed the impact on financial assessment would be a drop in business of about 15%. That in fact looks like what the drop in endorsements will be from fiscal 2015. But that means we also lost whatever increase might have taken place in fiscal 2016 without financial assessment as well.

      Not long ago someone pointed out that the endorsements for this fiscal year will not have a single month where the overwhelming majority of HECMs endorsed during that month did not go through financial assessment.

      Based on case number assignments, endorsements, and the modified annualized conversion rate, the total count for September 2015 most likely consisted of a majority of the HECMs being endorsed did not go through financial assessment. But it seems no month thereafter had even a significant number of endorsements from HECMs that did not go through financial assessment.

      One good sign for this fiscal year is that the case number assignment count for June 2016 is 12.9% better than for June 2015. Based on the four month lag rule, we should see a better endorsement count for October 2016 than for October 2015. Let us hope that we are off to a good start for fiscal 2017.

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