Total Reverse Mortgage Endorsements Fall in April

In a somewhat expected fall back to Earth, reverse mortgage endorsements dropped between April and May, but as in previous months there are still some signs of overall volume growth.

Home Equity Conversion Mortgage originators — including both Federal Housing Administration-approved firms and their non-FHA counterparts — logged a total of 5,034 endorsements in April, a drop of 6.0% from a particularly impressive March, according to the latest set of data from Reverse Market Insight. Retail endorsement slid 8.2% during that period, a steeper drop than the 3.6% dip in wholesale endorsements.

“April brought the obligatory drop in endorsements after the big month in March,” the Dana Point, Calif.-based research firm noted in its analysis. “That is still good enough for the second-highest volume month in the last 12 moths, and the fourth-highest in the past two years.”


John Lunde, RMI’s founder and president, had hinted at a coming decline in previous months, as the impressive endorsement gains weren’t necessarily paired with corresponding rises in counseling demand or FHA case assignment numbers.

“I know I talked to a couple of lenders, and they were catching up on endorsements, loans that had they’d funded but just hadn’t devoted the manpower to get them endorsed,” Lunde told RMD, adding that if endorsements declined in subsequent months, it could be a sign that the gaudy numbers early in the year were simply the result of “endorsement catch-up.”

In March, FHA and non-FHA originators generated 5,355 endorsements, the best single month since August 2013, Lunde told RMD at the time.

The recent drop also corresponds with the FHA-only data that RMI released earlier this month, which showed a slide from 5,036 in April to 4,854 in May; the FHA-exclusive totals run a month ahead of the all-inclusive statistics.

After American Advisors Group at 1,053, Finance of America Reverse came in second place for the month with 746, and Liberty Home Equity Solutions — despite ongoing troubles at its parent company, Ocwen Financial Corporation (NYSE: OCN) — close behind in third with 742. 

Written by Alex Spanko

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  • Based on Case Number Assignments in February and March, 2017, we can expect even lower monthly endorsements for both June and July totaling around 8,900 for both months. Since HUD has not posted any information on Case Number Assignments for any month past March 2017, we do not have any additional information to gauge how well this fiscal year will do.

    So far as is expected in a peak to valley pattern of secular stagnation, we are seeing a peak develop that is lower than the prior two peaks but higher than the three valleys that precede it. If the pattern stays approximately the same, we would expect to see total endorsements for fiscal 2017 of about 56,000 but that it looks as if the total is shaping up to be closer to 54,000 well within the expected range of outcomes.

    There are a number of other metrics that could be presented but for purposes of a comment, this is sufficient.

    It is interesting to read that there are “still some signs of overall volume growth.” This is the talk of optimists who lose elections citing higher smaller loss margins because they do not want to face the results.

    Growth that exceeds stagnation parameters will come but when? What will it take? More conversations, more referrals from financial advisors or Realtors, or maybe new ad spots with new spokespeople? Lots of questions with so far few legitimate answers.

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