Reverse Mortgage Inquiries Fall During Q1 2018

Confirming what originators have said for months, reverse mortgage inquiries were down in Q1 as compared with last year due to last October’s Home Equity Conversion Mortgage program’s rules changes, according to Best Rate Referrals Q1 2018 Mortgage Consumer Profile Report.

Best Rate Referrals, a consumer marketing finance firm that matches leads with lenders, sourced their data from consumers who were seeking to be matched with a lender, comparing information from January to December 2017 with January to March 2018. Only consumers with a credit score of “fair” or higher were included in the study.

Reverse mortgage decreases were seen after the HECM rules changes took effect.

Advertisement

“The changes made last fall are starting to show waning effects on the sustainability of the reverse mortgage product,” the report states.

According to the report, the average current home value of a potential HECM borrower decreased in most markets, signaling a shift for owners of higher valued homes away from the reverse mortgage product.

“New England had the largest decrease. Home market value increases were seen during Q1 2018 for the Mountain, South Atlantic and West South Central regions,” the report reads.

The report also highlighted a need for education about the reverse mortgage loan product, as there was an increase in Q1 2018 of inquiries from unqualified borrowers, like renters. The report noted that many reverse mortgage lenders left the market “due to restrictions placed on them with the program changes”.

“When lenders left the reverse market, they stripped related content from their website,” the report reads, attributing the education gap to the decrease in available information.

In March, originators said they did not notice many changes in the ages of borrowers inquiring about a loan, but Malcolm Tennant president of Access Reverse Mortgage Corporation, told RMD that he did note a higher proportion of need-driven inquiries versus financial planning-type inquiries.

Written By Maggie Callahan

Join the Conversation (9)

see all

This is a professional community. Please use discretion when posting a comment.

  • “The changes made last fall are starting to show waning effects on the sustainability of the reverse mortgage product…” So is the volume down 0.0003% or 98%?

    Other than anecdote is there any empirical evidence that shows that what the company says is in any way an indicator of what HECM endorsement volume will be? What is the statistical correlation?

    Case Number Assignment is directly correlated with endorsement volume. It comes through demand. Why not use data from a verified source rather than anecdotal data?

    I guess some people still love tea leaf readings too.

    Don’t misunderstand. It was nice of the interviewee to provide the information it had but why did the writer choose to use it?

  • The figures presented in this article don’t surprise me. I
    realize I sounded more optimistic 6 to 8 months ago but all that has been going on in the industry has made me change my thinking!

    Don’t take what I just said the wrong way, I still feel optimistic about the potential and the opportunities that are available, giving us the ability to rebound.

    However, I have seen many articles, news media sources and have had many conversations with people in our industry over the past months that have disappointed me very much.

    First off, the negative talk from originators, negative
    press from the news media and from others have been overwhelming! Negativity breeds negative results and that we sure have been seeing happening!!

    Another thing I keep hearing is the same old method of how to do business as usual from people in the industry.

    They are asking and saying, how many leads will I be getting, my phone is not ringing, the people I have been getting business from says, it has slowed down tremendously, my borrowers don’t qualify anymore, there is to much paper work now ETC!

    You can’t survive doing it the old way anymore! In today’s environment! One must work harder and work smarter than you ever have in the past! In short, you must get out in the new world and go get the business directly!

    Start working on collecting data on the professional sector
    of our society and start calling on them. Get brochures and marketing material geared for the professionals you intend to target.

    Start collecting data on senior homeowners that have little to no debt on their property, go after the higher value properties. Join your local chamber, network with everyone you can.

    Also, educate yourself continually and I mean continually. Many of the investors your company are selling their loans to, offer training courses and other educational tools for you. Take as many of these courses as you can and as often as you can!

    These are suggestions to the key to success in todays reverse mortgage environment. It will not be easy for many. It will take a completely different mindset to be able to change and adapt but many of you can and will!

    My thoughts on where I felt the industry would have been today have only just been delayed. We have not failed, we have just all run into a delayed success!!!!

    John A. Smaldone
    http://www.hanover-financial.com

    • John,

      What you describe as a delayed success, others have shown to be horrific losses for three years followed by a particular pattern of secular stagnation for almost six years now.

      Even though you make it clear that what originators are telling you is old HECM sales techniques, I read nothing in your comment that is.

    • John,

      I am lost. What is your position?

      Here are just some things you wrote on June 6, 2018:

      1) I have been hearing out there that activity has been better, applications have increasing somewhat with certain shops and the attitudes are becoming more positive out there.

      2) Never the less, more things are happening, companies and originators are taking a different approach to the industry and with our product.

      3) The additional good news is that originators and there companies are targeting different markets, going after the professional sector, those that deal primarily in the senior sector market.

      4) We are seeing attitudes changing by many in the industry, realizing the HECM is not a loan of last resort anymore. In fact, we can’t be looking at it this way anymore, in order to survive in the reverse mortgage space.

      5) To sum it up, this all spells good news for us all, providing this kind of momentum will continue. There is no reason why it can’t continue, unless something comes out from HUD and surprises us with another Lemon of a ruling! Hopefully we will not see that occur again for many moons to come!

      Compare those things to what you wrote in your comment above. Am I saying your June 6th, 2018 is all but the opposite of your comment above? Close to it.

      As to negativity breeding negative results, don’t you remember how negative the press was in 2009 and yet that is the year the industry hit its peak endorsement year EVER! Get ready for more of the same negativity but not from opinion but based solely on facts that HUD gives us.

      • George,

        read my comment again, it is different from the one of June. Yes, I do remember 2009 and yes, you are right, we will and we are getting the same negative press.

        I also agree with you about the facts HUD is giving us today!

        However, are you saying everyone should roll over and play dead?

        Do you not agree with me that those in our industry today can’t survive on relying on methods of doing business the way they used to?

        Are you saying the suggestions I gave in my comment you are attacking, pertaining to some of the things originators should be doing is wrong?

        George, I guess I am lost as to what is your position is?

        You sound like we should be giving up on our product and industry, that I don’t buy sir!

        Remember, the facts you are referring to are yesterdays statistics!

        Tomorrow is what we make of it, if you don’t understand that, you need to look at a different industry to get into!

        I am sorry for my boldness George, but I have been in the reverse mortgage space and mortgage banking to long to accept what you or others similar to you are saying!

        You make it a great day as well as all of you out there reading this comment!

        Thank you,

        John A. Smaldone
        http://www.hanover-financial.com

      • John,

        I hate to see you twist and turn with each new call for optimism, only to be soured by the facts. Right now I believe we are in secular stagnation that is continuing despite of (or perhaps because of) FHA changes to the HECM.

        Secular stagnation has not gone away nor will it go away because “tomorrow is what we make of it.” If that were true, Walter and MetLife would be with us and thriving. HUD could make almost any change it wanted to strengthen the HECM program or improve consumer protections and the endorsement numbers would be 300,000 for this fiscal year like some were propagating just 4 plus years ago.

        Although I agree with much you have to say, there is a lot we disagree on. Yet I have no right to tell you to leave the industry as you told me when you wrote: “Tomorrow is what we make of it, if you don’t understand that, you need to look at a different industry to get into!” I know a lot of hard working originators who worked much harder this year than they did in 2009. They meet with Realtors and financial advisers regularly but their production has not gone down this year.

        If you see how we can change total endorsements to be over 60,000 for fiscal 2018, please provide that information. However, I believe the fix on a total of less 50,000 endorsements for fiscal 2018 was in when the last case number was issued in June 2018, over two weeks now.

        The difference between the negative press of 2009 and today is that we view what is negative with a much “kinder” approach today. Is it helping our endorsement numbers. I don’t see it. My standard is what increases our endorsement number while at the same time being highly principled in the way we deal with seniors.

      • George,

        Why don’t we just agree that you and I agree on some things and not on others.

        There are to many problems in this world for us all to face and try and solve. You and I as colleges in the industry together do not need to get frustrated with one another, it is not worth it and life is to short!

        My apologies to you for saying what I did to you and how I worded it. Let’s you and I try and make it a good day, week and weekend.

        Thanks George,

        John

        John

      • John,

        You apologize by writing: “My apologies to you for saying what I did to you and how I worded it.” That is OK but that is not my concern.

        Notice again what you wrote on June 6: “To sum it up, this all spells good news for us all, providing this kind of momentum will continue. There is no reason why it can’t continue, unless something comes out from HUD and surprises us with another Lemon of a ruling! Hopefully we will not see that occur again for many moons to come!”

        There was good reason and logic to say the situation would not continue based on facts. Thank goodness by the end of month, everything was completely cleared up and brought back into focus but the cost was horrendous.

        There are other examples of too much optimism in our industry. Not long ago a very costly and risky marketing campaign had been agreed to. With no substance warranting it, we were supposed to believe that it was possible for 300,000 HECMs to be endorsed during fiscal 2018. The core of the lenders who were to cooperate in bringing this dream to fulfillment were the same lenders who agreed to introduce financial assessment with MetLife back in 2012 and then failed to live up to their commitment. Is it any surprise that the marketing campaign would fail as well?

        These are not the things that have to do with staying in the industry; they are all irrelevant. One key reason to stay in the industry is helping seniors do financially better in retirement. All of the other stuff is just distraction. We should not be those who fall apart when one month’s endorsement count (June’s) shrinks by over 15% from the prior month. That should be even truer when the prior month (May’s) was only 14 endorsements better than than the month before that (April’s). Someone just got carried away by a rather insignificant change in the month to month endorsement pattern.

        It is important to learn these lessons since they have a way of repeating. I am not against calling a Mortgagee Letter, a lemon, but was it really? That Mortgagee Letter will be very important in the basic understanding as to the degree that manipulating PLFs will produce lower projected HECM MMIF losses in the year of endorsement.

  • Hello all, this comment is in response to George Owen’s response to my comment on this article, which was the top comment so far!

    I responded to George by saying to him:

    George, read my comment again, it is different from the one of June. Yes, I do remember 2009 and yes, you are right, we will and we are getting the same negative press.

    I also agree with you about the facts HUD is giving us today!

    However, are you saying everyone should roll over and play dead?

    Do you not agree with me that those in our industry today can’t survive on relying on methods of doing business the way they used to?

    Are you saying the suggestions I gave in my comment you are attacking, pertaining to some of the things originators should be doing is wrong?

    George, I guess I am lost as to what is your position is?

    You sound like we should be giving up on our product and industry, that I don’t buy sir!

    Remember, the facts you are referring to are yesterdays statistics!

    Tomorrow is what we make of it, if you don’t understand that, you need to look at a different industry to get into!

    I am sorry for my boldness George, but I have been in the reverse mortgage space and mortgage banking to long to accept what you or others similar to you are saying!

    You make it a great day as well as all of you out there reading this comment!

    Thank you,

    John A. Smaldone
    http://www.hanover-financial.com

string(91) "https://reversemortgagedaily.com/2018/07/12/reverse-mortgage-inquiries-fall-during-q1-2018/"

Share your opinion