Reverse Mortgage Endorsement Numbers Begin to Show Surge

The most recent reverse mortgage endorsement numbers show the start of a long-predicted surge caused by the introduction of lower principal limit factors in October.

Home Equity Conversion Mortgage endorsements crept up 6.3% between October and November, with Federal Housing Administration-approved lenders turning in 4,782 loans. That’s according to the most recent report from industry analysts Reverse Market Insight, which credited the rush of applicants ahead of the deadline for the jump — but also offered a warning.

“We fully expect many of those last-minute applications will have a lower than usual pull-through rate in fundings and endorsements, but we should still see a couple more months of elevated volume before declining to significantly lower monthly totals in the wake of the 2017 PLF curve reductions,” the Dana Point, Calif.-based firm noted in its analysis.


Anecdotal reports of the pre-October 2 surge came in from all sectors of the reverse mortgage industry, from originators to housing counselors, but solid numbers have been hard to come by so far. RMI president and founder John Lunde has said that it could take until January for the full effects to be seen — and that the long-term volume drop under the new, lower PLFs could be as high as 25%, similar to what the industry endured after the introduction of Financial Assessment regulations back in 2015.

Industry leader American Advisors Group saw a 15.2% jump in November, with Synergy One Lending generating 22.8% more loans for a monthly record of 350. And a familiar industry name finally dropped out of the top-10 lenders list: Reverse Mortgage Solutions, which has existed as a servicing entity only since parent company Walter Investment Management Corporation (NYSE: WAC) shuttered its HECM origination channels in January, was supplanted by, Inc., in the number-10 spot.

Only Finance of America Reverse and Liberty Home Equity Solutions saw declines between October and November among the top 10 lenders.

Read the full report at Reverse Market Insight.

Written by Alex Spanko

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  • While the higher endorsement period could be extended to February or over in December, RMI has this story just about right. If the decrease for the last seven months of fiscal 2018 is 25% then fiscal 2018 could be the sixth year of secular stagnation of a slightly downward slopping peak to valley pattern.

    In my first five years in the industry, I never knew a down year although the last two of those five years was spent with very slowing growth to the point of stagnation.

  • First off, what my friend Jim Veale just stated has a lot of Merritt to it.

    However, we should not get exited so quickly, we are seeing the surge due to the rush of case assignments pulled prior to October 2nd.

    A true surge will occur when the industry figures out how to go about approaching new markets, accepting the changes that have come into play and come to grips that the large commission payouts of the past on each closed loan are not going to be there any more.

    This does not mean one can’t be successful in this industry, on the contrary. If we can adapt the way I outlined it above, an LO can do more volume and make as much as they ever have. Think real hard on that one my friends!

    John A. Smaldone

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