Reverse Mortgage Endorsement Pattern Continues with July Drop

Total reverse mortgage endorsements dipped by 12.0% from June to July 2017, with a larger drop for retail than wholesale, according to the most recent data from Reverse Market Insight.

Reverse mortgage originators — including both Federal Housing Administration-approved lenders and their non-FHA counterparts — turned in 4,253 endorsements in July, a dip of 582 loans from June. Retail endorsements fell 13.6%, as compared to a 10.4% slip on the wholesale side.

Of the top 10 lenders, Finance of America Reverse was the only one to post a gain between June and July, coming in with a 4% increase during that span. The Queens-based Quontic Bank, which launched a call center last year in an attempt to expand, saw a 79.3% month-over-month jump to finish in 12th place for July.

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The 12.0% figure more or less matches the Dana Point, Calif.-based research firm’s previous analysis of only  FHA-approved lenders, which showed a 12.1% dip between the two months. Reverse Market Insight generally releases the two reports about a month apart.

August, meanwhile, revealed a rebound for the FHA-only report, as RMD reported last week: Endorsements among that set rose 15.8% in August, breaking a string of down months that began in April.

The complete list has also been in the red since a white-hot March that saw 5,355 endorsements, though July represented the steepest drop of any month since totals fell 14.6% between August and September 2016.

Still, many industry experts are predicting a blockbuster September as consumers rush to secure loans before principal limit factor restrictions and changed mortgage insurance premium rates, with some counselors reporting packed schedules.

Read RMI’s full report here.

Written by Alex Spanko

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  • I just wish that the endorsements for the month of September 2017 would be exactly 5,270 so that the total endorsements for fiscal year 2017 would be exactly 56,000 which would almost be exactly where the current pattern of secular stagnation models shows where it should be. It should be close enough to that number so that we can say that the peak and valley pattern and secular stagnation itself sill hold.

    It is rare to find a classic pattern of peaks and valleys in secular stagnation for a period of five straight years. In fact with the changes of Mortgage 2017-12 there seems to be a growing consensus that the pattern will continue for the total endorsements of fiscal 2018 ending up at around 46,000 endorsements or less. If the total endorsements for fiscal 2018 go beyond 42,000, perhaps we will see an end to the pattern of peaks and valleys and instead enter into a new period of endorsement loss somewhat proportional to the losses of 2010 to 2012 but let us not carried quite yet. September 30, 2018 is over a year from NOW.

    Who knows if Larry Summers were notified maybe he would use the HECM endorsement pattern in his current blogs to demonstrate the relevance of Secular Stagnation in the mortgage industry thus further justifying the secular stagnation views of Alvin Hansen, the American Keynes, as he is called? While some might argue that extenuating circumstances created our current pattern, it is these exceptions that further bolster the secular stagnation theory. Imagine the HECM endorsement history being used to demonstrate the relevance of the once discredited theory of a high ranking FDR official and former professor of economics at Harvard. As Hansen stated all we can do is wait it out or keep trying new avenues of demand to hasten its end.To those who want this talk of secular stagnation to stop, hasten its end through finding new avenues of demand.

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