March Data Reveals New Normal For Reverse Mortgage Volume

When looking at the raw data, Home Equity Conversion Mortgage (HECM) endorsements seemed to drop sharply by a figure of 35.7 percent, to 2,573 loans for the month of March 2019. When looking more closely at the details, though, the figure is actually much closer to the average observed between December and February, according to the March HECM Lenders report compiled by Reverse Market Insight (RMI).

“That [drop] is certainly a lot, but is actually very close to the average for Dec-Feb we discussed last month as a way of reducing the noise of the government shutdown shifting volume between those months,” said RMI president John Lunde in introducing the March data. “Now that we finally have a clean month it looks like the last five months on average have all been right around this month’s level.”

When asked if the March data recorded the beginning of a “new normal,” RMI president John Lunde seemed confident that the data has finally started to settle into relative normality for 2019, and indicates the likelihood of an identifiable trend.

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“I think we’ve settled in right around 2,500 loans per month based on the last five months,” Lunde told RMD in an email. “Obviously [we] want to see growth from there, but it seems reasonable to expect that’s the current level of the HECM product right now. Divergence from either direction from here on a multi-month basis would signify a new trend.”

Because of the partial federal government shutdown that stretched from December 22, 2018 to January 25, 2019, HECM endorsement data was clouded significantly and remained obfuscated through February. While the February data appeared to show a massive spike in endorsements overall, indications at the time were that the observed increase likely indicated the data correcting itself after the general disruption caused by the shutdown.

In terms of March’s regional data highlights, the Pacific/Hawaii region performed best but still declined 18.6 percent to finish at 783 loans, though the region was up 15.7 percent from the recorded average from December-February. The Southwest region recorded a large drop for March, but still managed to stay 10.1 percent higher than the December-February average.

Similarly, the New York/New Jersey region also recorded a drop, but also remained above the December-February average by 7.5 percent.

Standouts highlighted by RMI in terms of lender-specific numbers saw that Liberty Home Equity Solutions dropped by 0.7 percent, but also performed 36.4 percent higher than the December-February average. One Reverse also managed to perform higher than the average for the same period of time, even with a recorded drop of 39.5 percent.

Read the full HECM Lenders report for March at RMI for specific breakdowns and detailed regional performance data.

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