Home Equity Conversion Mortgage endorsements jumped 142.7 percent to 4,002 loans in the month of February. While that level of increase is enough to turn anyone’s head, it’s still difficult to tell if the increase observed is correcting after the 2018-19 partial federal government shutdown clouded endorsement figures for January, said Reverse Market Insight president John Lunde.
While the shutdown is likely still having an effect on current endorsement figures, an increase like the one seen here may not necessarily be fully explained as a correction from previously obfuscated figures, Lunde said.
“I’m generally optimistic but I think it makes sense to take February endorsements with a grain of salt given the potential catch up effect from the shutdown,” Lunde told RMD in an email. “That said, I didn’t expect numbers this high for February and would be encouraged to see volume in this range continue for March and beyond.”
Still, figures for March and beyond will need to come in before any major statements can be made on the final effect the shutdown may be having on endorsement data.
“I do think the shutdown alone wouldn’t account for the size of the February increase, which is positive for the industry overall,” Lunde continued. “But we’ll need to see March and beyond to really know how much to attribute to shutdown catch up vs. general industry volume growth from the product changes.”
The industry average for the past three months in total has risen to 2,467 loans, more representative of the industry’s “new normal,” according to Lunde.
“In any event, it’s good to bring the average […] to something closer to the new normal rather than nuclear winter levels of the last 2 months in isolation,” he said in introducing the HECM Lenders report.
The pronounced growth in volume this month affected regional data, with the Great Plains region seeing 98 new loans compared to January’s recorded total of eight. Several other areas including the Rocky Mountains and Southwest jumped well over 100 percent compared with their January figures.
Among the top ten lenders, the best overall performance came in from HighTechLending, increasing their three-month average 2.6 percent compared to figures from September-November. Six of the top 10 companies have outperformed an overall industry decline rate of -13.2 percent.
Read the full HECM Lenders report at RMI for specific breakdowns and regional performance data.