Reverse Mortgage Volume Fallout Begins for Post-Oct. 2 Era

The expected fallout of reverse mortgage loan volume following program changes implemented on October 2, 2017 is beginning to emerge in terms of real numbers, according to data released Tuesday by industry data and analytics firm Reverse Market Insight (RMI).

With an endorsement decline of more than 17% during March, the industry saw its lowest loan production since July 2017. The July figure came prior to the October 2 changes which altered the mortgage insurance premium structure for borrowers and reduced principal limit factors for many.

With the endorsed loan count during the month at 4,300, “it will get worse before it gets better,” RMI wrote in its summary of the data.


From a regional perspective, eight of the top 10 Home Equity Conversion Mortgage markets fell, while a few lenders bucked the downward trend. Live Well Financial rose 34.7% during the month, Nationwide Equities (which has recently rebranded its reverse offering to Reverse Loans USA) surged by 34%, and One Reverse Mortgage eked out a 3.2% uptick with 261 loans in total.

In the post-October 2 operating environment, lenders and originators have speculated on the fallout, although it remains to be seen when the market will realize a “new normal.” In recent weeks, many have taken note of the heightened competition and changing lending climate, including new competition on interest rates and origination fees due to declining lender margins.

Future endorsement data will likely show a sustained downturn, based on industry estimates. For the time being, RMI noted, the climate will be different.

“And now it’s clear that we’re in a post 10/2 world for HECM endorsements,” RMI writes.

View the RMI report.

Written by Elizabeth Ecker

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  • It is expected that the third quarter of fiscal 2018 will see fewer than 8,000 endorsements. If the endorsement count for that quarter is exactly 8,000 endorsements, that would be the lowest count for endorsements for any calendar quarter since December 2003.

    Obviously if that endorsement count comes in significantly lower, we may be looking still further back in HECM history to locate a calendar quarter with a yet lower endorsement count. While March 2017 had a substantial drop in endorsements compared to February 2018, the endorsement count for April 2018 could be worse, much worse when compared to February 2018.

  • I semi agree with my friend Jim Veale, numbers don’t lie and there is no one better with numbers than Jim!

    However, we also have to look on the bright side. Why is Live Well Financial figures at a rise of 34.7% during the month? Why has Nationwide Equities shown a surge of 34%? And then we have One Reverse Mortgage edging up with a 3.2% increase. Not a lot for One Reverse but it was an uptick!

    They are doing something right and if the industry as a whole can get out of the negative hole it is in and become creative, we just may make our friend Jim’s figures out to be wrong, regardless of how good he is!

    We have many positive’s out there, the H4P can be a product we can bring to life. The professional sector can be a saving grace for us.

    And if we go back to really working and I mean getting out there and networking, knocking on doors and holding educational workshops, and any thing else we can do, we can crack the dull-drum!

    Look at the amount of equity in the hands of senior homeowners we now have! Look at the amount of baby boomers turning 62 years of age daily! We have more senior homeowners available that need us and our product than we ever had!

    I would like us to take my friend, Jim Veal, along with his statistics and prove him entirely wrong (For the industries sake Jim)!

    You know what, I feel very convinced we can do just that, regardless of how knowledgeable Jim is and how good he is with his predictions! Our product is great, it has been hammered, misrepresented and abused but it is truly great and can do great things for our senior population. In some ways, a lot more than our Federal government can or will!

    John A. Smaldone

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