January Reverse Mortgage Volume Highest Since ’11

After months of waiting for evidence of a surge, reverse mortgage origination numbers set a recent record in January.

Federal Housing Administration-approved reverse mortgage lenders logged 6,313 endorsements last month, making it the best month for the industry since March 2011 according to the most recent numbers from Reveres Market Insight.

That’s a 32.5% growth in endorsements, and 48 new lenders entered the fray compared to the previous month. With this most recent data release, the industry can begin to see the breadth of the demand in the weeks leading up to October 2, when the Department of Housing and Urban Development instituted lower principal limits and a new mortgage insurance premium structure.

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Still, RMI cautioned that the fall is coming soon.

“We’ll see next month if that’s the peak endorsement month for this latest product change, but we already know subsequent volume will be greatly reduced given the much lower application and case numbers issued figures after September,” the Dana Point, Calif.-based RMI noted in its analysis.

In previous months, RMI president John Lunde has predicted that endorsement volume could drop by 25% to 30% once the pre-October bump works its way through the system. That would put the decline on track with the drop after HUD and FHA implemented the stricter Financial Assessment rules in 2015.

Demand for Home Equity Conversion Mortgage counseling sessions has also declined since the new principal limits took effect, with one provider saying the “new” reverse mortgage product is more of a loan of last resort.

Leaderboard breakdown

Liberty Home Equity Solutions saw its production triple, with 576 loans — as compared to 192 in December — for fourth place on RMI’s overall leaderboard for the 12 months ended January. Industry leader American Advisors Group logged 1,218 loans last month, compared to 1,141 in December; Finance of America Reverse and Reverse Mortgage Funding rounded out the top three lenders for the month.

In terms of geography, the Northwest region saw the largest gains with a 86.9% jump from month to month. Portland, Ore., for instance, saw reverse mortgage originations go from 71 to 222 — a 212.7% gain — while nearby Seattle had a 146.3% jump in volume.

Written by Alex Spanko