HECM Endorsements Rise 9.8% in August; Recovery Still Slow

While recovery remains sluggish, Home Equity Conversion Mortgage endorsements continued to climb in August, rising 9.8% from July for a total of 3,191 loans, according to the latest data from Reverse Market Insight.

The HECM Originators report shows the gains were spread across both retail and wholesale channels, with retail up 8.2% and wholesale up 12.1%. This is the first time that both FHA and non-FHA originators experienced growth since January when the October 2017 principal limit reductions were beginning to show their effects.

“Both channels were up for the first time since the most recent round of product changes kicked in, which suggests more sustainable volume levels longer term than a more narrow recovery in just one channel or the other,” RMI president John Lunde told RMD in an email. “Obviously it’s not as good as stronger growth but I think it sets the stage for future growth and recovery.”

Advertisement

He said the numbers do not change any of his previous statements about the slow speed of this recovery.

Seven of the top 10 lenders experienced this growth, with One Reverse experiencing the biggest jump at 22.2% to 275 up from July’s 225. LiveWell Financial was right behind, logging a 20% increase with 186 loans. American Advisors Group continued to be in the number one spot, holding 28% of the market share and 878 loans, an increase from 825 in July.

Different from RMI’s HECM Lenders report, Lunde said that the HECM Originators report is useful in seeing the splits and health of the retail versus wholesale channels and to see where lenders are doing well from a channel perspective.

Written by Maggie Callahan

Join the Conversation (4)

see all

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

  • 17 days ago, HUD posted the endorsement numbers for September 2018 and the loss was 9.7% from the August 2018 total. Worse on 6/6/2018 a declaration was made that the nadir for endorsements (the endorsements for April 2018 at 3,345) following the 10/2/2017 changes had been reached. A second declaration that the endorsements for June 2018 at 2,838 was the real nadir was made about a month after the first.

    The September 2018 total for endorsements at 2,880 was so bad it was just 42 endorsements better than the endorsements for June 2018. The total endorsements for September 2018 were 37% lower than the endorsement total for September 2017.

    What is critical is that since 6/6/2018, there has not been a single month where the endorsements for that month has exceeded the total for April 2018. That means that the endorsements for each and every month following 6/6/2018 (five straight months of endorsements) has been lower than the endorsements for April 2018.

    There is a strong belief among those who have done this projection work for years with adequate and reasonable accuracy that the nadir following 10/2/2017 changes will need to be declared anew. The indication is that it will occur in one of the following months: October 2018, November 2018, or December 2018.

    It is clear that the case numbers for the three consecutive months ended August 31, 2018 at a total of 14,030 is clearly insufficient to produce the 14,041 endorsements for the quarter ended 12/31/2017. In fact at a 63.8% conversion rate total HECM endorsements for the quarter ending 12/31/2018 should come in at around 9,000 or 5,000 lower than for the same period in 2017 (a projected loss of 35.6%).

    To say there is a rough road of recovery ahead is an understatement. Unlike those who pontificate, I find no evidence of recovery even now. Demand is still in stagnation.

  • I thought this article was a positive report but if I am understanding from George Owens comment, that is not the case?

    George has a lot of statistical data in his comment. From what I have seen in the past on many of George’s calculations he has usually been on target!

    I guess I ask myself, am I understanding George Owens comment right, if I am, than the report from Reverse Market Insight is not accurate, right?

    The report from Reverse Mortgage insight was encouraging. It showed the gains were spread across both retail and wholesale channels.

    The report also showed retail was up 8.2% and wholesale up 12.1%. The report also stated this was the first time that both FHA and non-FHA originators experienced growth since January when the October 2017 principal limit reductions were beginning to show their effects.

    To me, this should give us all a glimmer of hope! Again, is George right and the Reverse Mortgage Insight wrong??

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

    • John,

      The problem is both of us are right but RMI totally ignores September 2018 endorsement data to give a positive twist on the August 2018 FHA Production and HECM Snap Shot Reports which were released earlier this week. The September 2018 endorsement count was released on September 29, 2018 well over two weeks earlier than the August 2018 FHA Production and HECM Snap Shot Reports.

      Usually the HUD HECM Endorsement Summary Report for any month is released within one calendar day after the last day that endorsements are processed for that month. For September that last day was September 28, 2018.

      On the other hand, the FHA Production and HECM Snap Shot Reports are not released until about 45 (if not more) days after the month end for which it is reporting. Thus these two reports for August 2018 were not posted until the middle of October (earlier this week).

      What I am pointing out if that we know much more about demand as of October 17, 2018 than this RMD October 18, 2018 article and the related RMI report reflect. While RMI can limit its report and maybe should, RMD should not be bound by the limited information RMI presents and RMD should report all data known at the time of its article.

      So if anything, the question is not whether the RMI article is accurate or me, George Owens, but it should be whether RMD is reporting all information available to it and, in fact, previously reported by it. For example the September 2018 endorsement count was reported by RMD on 10/2/2018. As an avid RMD reader and frequent commenter, I am surprised you did not catch it.

string(101) "https://reversemortgagedaily.com/2018/10/18/hecm-endorsements-rise-9-8-in-august-recovery-still-slow/"

Share your opinion