First, the good news: Year-to-date reverse mortgage originations through March are actually higher than they were this time last year.
Now the bad news: March’s total came in below the same-month figures in 2017 and 2016 as the October 2 surge continues to give way to the post-change drought.
“Q1 volume still came in 10.1% ahead of last year based on the January and February volumes, but tough sledding is ahead,” Reverse Market Insight warned in its most recent data release.
Home Equity Conversion Mortgage lenders logged 15,801 originations during the first three months of the year, the Dana Point, Calif.-based firm determined in its HECM Trends report for the month of March. In addition, individual geographic areas showed some positive signs of growth, with recent hotbeds like Washington state and Oregon seeing year-over-year growth of 51.8% and 45.3%, respectively.
King County, home of Seattle, saw 41.6% in endorsement growth between the first quarters of 2017 and 2018, RMI observed, with about 36.2% of that volume consisting of HECM-to-HECM refinances.
Nationwide, however, refinance transactions are on the decline after a 2017 that saw 6% growth in that particular corner of the reverse mortgage marketplace. HECM-to-HECM refis represented 9.7% of all volume in March, down sharply from the 14.3% figure at this time last year.
Last November, a top Ginnie Mae official warned about the potential uptick in reverse mortgage refinances in the wake of the lower principal limit factors introduced last October.
“I think the industry needs to be careful, particularly given the new program rules and possibilities that have come into place lately to allow business models to arise that are specifically dedicated to the continual refinancing of loans,” Ginnie Mae senior vice president Michael Drayne told an audience at the National Reverse Mortgage Lenders Association’s annual conference in San Francisco.
American Advisors Group continues to lead the pack among HECM originators, with 3,074 endorsements in the first quarter; second-place One Reverse Mortgage had 808. Liberty Home Equity Solutions leapfrogged Reverse Mortgage Funding to take third place with 633 loans.
Written by Alex SpankoPrint Article