The total volume of Home Equity Conversion Mortgages (HECM) endorsements in Q1 2019 dropped by 18.19 percent from the previous quarter to $2.48 billion, while HECM endorsement counts in FY 2019 Q1 declined 17.67 percent from last quarter to 7,388 loans.
This is according to the U.S. Department of Housing and Urban Development (HUD) Federal Housing Administration (FHA) Single-Family Mutual Mortgage Insurance (MMI) Fund Programs Quarterly Report to Congress, delivered to the legislative body on Friday, March 29.
The report also featured an adjustment to the way the HECM program’s numbers are reported.
“As of FY2019 Q1 we have discontinued the reporting of maximum claim amount (MCA) and replaced with the actual HECM Claim paid amounts as we believe this is more indicative of actual claim costs,” the report read. “Total HECM program claims increased this quarter by 47.36 percent from 16,095 loans to 23,718 loans due to higher number of Assigned Claims to HUD.”
The budget execution credit subsidy rate (CSR) for FY 2019 Q1 is at -0.15 percent for the HECM program, as well. While these numbers are demonstrably lower in terms of raw volume and total rate of new recorded originations, they also reflect the stall inflicted on the HECM program by the partial federal government shutdown that paralyzed new reverse mortgage activity at the beginning of the year.
Much of the early endorsement data that emerged in the aftermath of the shutdown was obfuscated by the government gridlock. It is as yet unclear if the endorsement and volume figures have cleared the distortive effects of the shutdown.
Read the full report.