The full November reverse mortgage endorsement stats are out, showing the beginning of the pre-October 2 surge — but only on the retail side.
Home Equity Conversion Mortgage originators generated 4,781 loans in November 2017, according to the most recent data from industry analysts Reverse Market Insight. That total includes Federal Housing Administration-approved lenders and their non-approved counterparts.
Retail endorsements accounted for 2,692 of November’s haul, a 13.7% increase from the previous month. Wholesale production, meanwhile, actually decreased slightly, sliding from 2,130 to 2,089 — a drop of 1.9%.
“HECM endorsements grew 6.3% in November, the first sign of additional case numbers issued under pre-October. 2 rules showing up in endorsement volumes,” RMI observed in its analysis.
RMI also pointed out several impressive individual performances, including a 93.5% month-over-month gain for Longbridge Financial, which cracked the top 10 in tenth place, as well as a 16.7% rise for Synergy One and a 15.5% bump for industry leader American Advisors Group.
Still, despite the surge, industry players widely expect the associated fall to come early this year: Once the October 2 implementation of lower principal limit factors and updated mortgage insurance premiums came and went, many lenders and originators reported drop-offs in interest among borrowers.
After the release of RMI’s full-year recap of FHA-approved lenders only — which showed a substantial year-over-year increase — founder John Lunde told RMD that the fall-off from the peak could be in the 30% range.
In particular, Lunde blamed the slight fall-off in expected rates, which he said indicates that certain borrowers may have to bring more money to closing than they had in the past.
“That implies that the pricing in the market is basically accepting the majority of the PLF cut as opposed to choosing to take an expected rate cut and a margin cut, and avoiding more of a PLF cut,” he said.
Written by Alex Spanko