Some Lenders Buck Reverse Mortgage Downturn

Following recent data reports that indicate reverse mortgage volume has fallen roughly 15% year over year based on year-to-date loan counts, reverse mortgage volume for September is in alignment with that trend. But some lenders are defying the downturn and are driving sales accordingly.

Home Equity Conversion Mortgage volume declined 14.7% during the month, according to Reverse Market Insight, which the data provider says makes the recent volume increase in August “look more like an outlier for now than a new growth trend.”

Across all of the top 10 geographic regions volume fell, with the Rocky Mountain region experiencing the largest decline at a loss of more than 42%. Across a short-term time frame, however, one region that shows some promise is the southeast/Caribbean region.

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“The one that seems promising is the strength in SE/Caribbean the past 2 months,” says RMI Founder and Co-President John Lunde. “If it continues, that could be a great sign for the industry, but [Hurricane Matthew] could wreck any momentum there.”

The lender landscape produced a slightly sunnier picture, with several lenders bucking the downward trend. Mahwah, New Jersey-based Nationwide Equities reported its highest monthly volume across the last 12 months, counting 145 loans or a rise of 46% month over month. Both Liberty Home Equity Solutions and Live Well Financial also saw monthly increases around 37% and 36%, respectively.

American Advisors Group, which has long held the position of top reverse mortgage producer, also continues to see an increase in loan count with a 3.8% increase in September, to 882 endorsements during the month.

View the monthly RMI report.

Written by Elizabeth Ecker

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  • How can there be a growth trend when September was lower than August and July was lower than June? It is odd it was even suggested. It takes at least two months resulting in the same pattern to create a trend.

    Four of the last five months have had under 4,000 endorsements; that is a very troubling pattern. What RMI did not mention is that this is the second month in a row where the twelve month trailing total was less than 50,000. HUD fiscal year 2016 ended with the lowest total endorsements in over a decade. It was the first fiscal year with five months of endorsements of less than 4,000 in over a decade.

    Fiscal year 2015 was the last fiscal year where each month had far more endorsements where the related borrowers were not required to go through financial assessment than those who were. Fiscal year 2016 is the first consecutive 12 month period where all but an insignificant percentage of borrowers had to go through financial assessment.

    Comparing the endorsements for fiscal 2015 to those of fiscal 2016 should give us a good idea of the impact of financial assessment on endorsement volume. What we see is that endorsements were 15.8% lower for fiscal 2016 than fiscal 2015. This indicates that those who believed that financial assessment would result in lower business of around 15% were right.

    • It’s obvious from your pseudonym that you’re pessimistic and looking to disprove anything you consider too optimistic. But in no place did we call a one month rise in endorsements a new growth trend, in fact, we said just the opposite. September coming in lower than August eliminated the possibility of August’s (somewhat surprising) rise being the start of a new growth trend.

      More careful reading and less immediate bluster might serve you well sir.

      • John,

        I am no pessimist, just a realist. Optimism means a positive outlook in the face of all facts good or bad. Failing to report the bad comes from another source other than optimism.

        September 2016 was the 12th straight month in a row that the total endorsements for that month were less than the endorsements for the exact same month the year before. Yet where is that discussed?

        Also, the 12 trailing month total was lower for each of the last four months of last fiscal year (2016) than for the same four month period in fiscal 2015.

        Yes, sometimes I do not read things carefully enough and have too much bluster but I am not afraid to say as much.

        So one can only conclude that being a careful reader and avoiding bluster, you selectively choose what you report and intentionally leave things out on some subjective criteria which you have not shared publicly. That is not what I call being an optimistic analyst.

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