HECM Endorsements Jump in August, But Rule-Change Bump Still in Future

Reverse mortgage endorsements jumped 15.8% between July and August, with solid gains on both the retail and wholesale sides, but it’s still too early to see the effects of the recent mortgagee letter on actual origination demand.

Home Equity Conversion Mortgage originators — including those approved by the Federal Housing Administration and their non-approved counterparts — generated 4,923 loans in the month of August, according to the most recent data from Reverse Market Insight. That’s a major rally after a weak July that saw a 12.0% drop from June.

Retail endorsements spiked by 17.8% between July and August, with a still-strong 13.6% gain on the wholesale side.


While it might be tempting to ascribe the gains to the recent push to lock in previous principal limit factors after the release of Mortgagee Letter 2017-12 in August, RMI founder and president John Lunde says it’s still too early to tell.

“[We] might see some of that come through in November to January endorsements,” Lunde told RMD in an e-mail.

However, Lunde also noted that the overall effect may be “muted” by the fact that endorsements will likely decline in the wake of the October 2 switch to new principal limit factors.

With the exception of Reverse Mortgage Solutions — which shuttered its origination business in January — nine out of the top 10 lenders saw gains of 10% or more, according to RMI. One Reverse Mortgage logged a 59.7% increase, with Live Well Financial and HighTechLending recording jumps of 34.1% and 33.7%, respectively.

Check out RMI’s full analysis here.

Written by Alex Spanko

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  • John,

    In this day and age, I doubt if there that many closing that took place between 8/29/2017 and 10/1/2017 which had case numbers issued after 8/29/2017 and fit the profile of a pull forward closing.

    Almost all of the closings in September came from July or August case number assignments. Most of us were busy in September getting HECMs to where they could have a counseling session before 9/23/2017 (7 day cool off in California) so that a case number could be pulled before 10/1/2017.

    Closings on the “pull forward” HECMs were not a top priority but getting a case number issued by the deadline was.

    According the Blue Ocean Strategy, “the professional business sector such as financial planners and advisors, home health care providers, small community banks and any entity that deals with the senior population” is by now more Red Ocean than Blue Ocean.

    We need new sources for referrals. We also need better marketing to more efficiently and effectively target the seniors who are the most like to originate.

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