Wholesale and Retail Reverse Mortgage Channels Jump in February, Shutdown Backlog Ends

Home Equity Conversion Mortgage (HECM) endorsements saw a significant jump in February, with total endorsements rising 142.6 percent to a total of 4,000 loans, according to the latest data from Reverse Market Insight (RMI). However, the pronounced spike in endorsements across both the retail and wholesale channels is likely indicative of the remaining effects from the partial federal government shutdown experienced at the start of 2019.

The HECM Originators report for February 2019 shows jumps in both the retail and wholesale channels, with retail jumping 131.8 percent to 2,343 loans. The Wholesale channel also recorded a pronounced spike of 159.7 percent to finish at 1,657 loans.

The partial government shutdown that stretched from the end of 2018 and well into the beginning of 2019 likely accounts entirely for the overall spike in endorsement data, said RMI President John Lunde, who notes that this data completes the backlog generated by the shutdown.

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“Yes, this is the catch-up month from December – January, with March figures giving us some confidence in that interpretation,” Lunde told RMD in an email. “[This data is] pretty much what we covered [at the] beginning of this month in HECM Lenders.”

Several lenders enjoyed a very high level of performance in this month, with Lunde describing the activity as “banner” performances for a few particular stand-outs. Finance of America Reverse in particular saw an increase of 806 percent to 725 loans, followed by One Reverse’s 376 percent spike to 352 loans. Fairway also performed very well, growing 239 percent to 122 loans.

“It was good to see some lenders really power the month, although that may be as much a result of endorsement practices and processes than anything else,” Lunde added.

Although the overall percentage figure is nearly identical to RMI’s previous February HECM Lenders report, Lunde previously detailed for RMD that the HECM Originators report is useful in seeing the splits in and health of the retail versus wholesale channels, which helps to illustrate how lenders are doing from a more individualized and channel-specific perspective.

Read the full HECM Originators report at RMI for specific breakdowns.

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