Reverse Mortgage Endorsements Trickling Downward, Still at Post-FA Highs

Home Equity Conversion Mortgage endorsements fell by 3.6% from April to May, according to the latest data from Reverse Market Insight.

The Dana Point, Calif.-based research firm counted 4,854 reverse mortgage endorsements among Federal Housing Administration-approved lenders last month, down from 5,036 in April and March’s recent record high of 5,364.

The slow but steady slide may quell rumors of a HECM resurgence for now, and the recent drops also confirmed what RMI founder and president John Lunde told RMD last month: While volumes had been higher recently, the gains could very well have been the result of a released backlog, particularly since Lunde said he hadn’t seen corresponding spikes in FHA case number assignments or demand for counseling sessions.


RMI’s most recent post allows that the May report “paints a picture of gradual decline,” but also notes that the single-month numbers mark a significant improvement over figures in the immediate aftermath of Financial Assessment in 2015.

“For context, it’s also above any other month from September 2015 through February 2017, so still a step above where the industry has been since Financial Assessment was implemented,” RMI wrote.

Finance of America Reverse slipped from the number-two spot in May, ceding the silver medal to Reverse Mortgage Funding; American Advisors Group, predictably, led the pack with 1,028 loans. Live Well Financial also logged an impressive gain, turning in 172 loans for an increase of 29.3% — their strongest month since last September, according to RMI. Nationwide Equities also saw a 19.8% jump from the previous month.

RMI’s “HECM Lenders” report provides a breakdown of loan endorsements from FHA-approved lenders only; the all-encompassing “HECM Originators” list is due later this month.

Written by Alex Spanko

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  • The article looks at HECMs as if we are limited to looking at HECM totals for just fiscal 2016 and 2017. That is ridiculous no matter who is promoting it.

    If straight lines are drawn on a graph from fiscal 2012’s total endorsements to fiscal 2013’s, to fiscal 2014’s, to fiscal 2015’s, and then to fiscal 2016’s, what we see is an irregular shaped M with a slight downward slope. Now in fiscal 2017, we should be expecting another rise in fiscal year endorsements similar to what we saw in fiscal years 2013 and 2015 AND it seems we are.

    In 2017 we are simply stuck in the fifth year of secular stagnation. Yes, STAGNATION. Let us get over trying to look for deep answers for what ails us. What few in the industry are interested in listening to is that since fiscal 2007, rises in home values, rises in home equity, substantial growth in the senior segment of our population over 62 and every other measure that we once thought positively impacted and stimulated the growth in fiscal year endorsements have proved to be not just questionable but also very misleading sources for growth.

    Since 2007, we have seen 2 years of plateau stagnation with a slight rise each year, 3 years thereafter of horrible losses, and now — 5 straight years of secular stagnation with an irregular shaped M pattern going going up one year and down the next but all over a very limited range of about 11,000 endorsements. That is by definition classical stagnation.

    It was not financial assessment that caused the rise in endorsements in fiscal year 2013 or the drop during fiscal 2014. The rise in endorsements in fiscal 2015 was not caused by financial assessment. Even the drop in endorsements last year was in the acceptable range for classical stagnation. Unfortunately until last year, people like me had not seen the current fiscal year pattern of stagnation.

    Why are so many afraid to discuss stagnation when it comes to endorsements? Because that means there is little the industry can do to push endorsements in the right direction. Will we stay in stagnation forever? Absolutely not but will the result be even lower endorsements or greater endorsements? That is the frank discussion we need so that we target the right marketing stimulus but it is also exactly the conversation few, if any, are willing to hold. Instead some ridiculously point to HECMs for Purchase as our way out and others point to referrals from financial advisors which some sage originators have declared will ultimately produce endorsements but not the quantity of endorsements needed to break the back of our current dilemma which since 2011 has been shown to be the case.

    To be clear financial assessment had nothing to do with our current pattern of stagnation but did cut out a very productive segment of seniors who had a relatively high demand for HECMs. That cut out will be with us and harm us for years.

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