Home Equity Conversion Mortgage (HECM) endorsements rose by a figure of 12.7 percent to 2,901 loans for the month of April 2019. This figure is the first in several months not to be accompanied by the disruptive statistical noise generated by the 2018-19 partial federal government shutdown, according to the April HECM Lenders report compiled by Reverse Market Insight (RMI).
“[This comes] after several months of noisy data due to the government shutdown and a seasonal slowdown at the end of 2018,” said RMI president John Lunde in introducing the March data. “Combined with the highest HECM case number issuance level in March since last August (strongly correlated with applications for HECMs), reverse is looking fairly positive as springtime rounds into full form around the country.”
While this rise in endorsed loans is encouraging, this data is far from indicating a specific trend, Lunde told RMD in an email. Because of that, it’s worth waiting to see what transpires over the next couple of months before making any determination on an actual trajectory.
“I always like to see a couple months for confirmation when we’re dealing with endorsement data, so I’m not getting too excited yet,” Lunde explains in an email to RMD. “That being said, April was significantly above the 2,500 loans/month level we’ve averaged for the past 5 months which is a positive data point. The additional confirmation of strong case numbers issued in March supports the idea of a potential upward trend in HECM volumes as well.”
Even with that being the case, the long arm of the October 2, 2017 changes is still playing a factor in determining where business levels will ultimately settle.
“Wait for a couple months around this level or higher before sounding the all clear,” Lunde advises. “And remembering just how low we still are relative to where we were before the October 2017 changes should keep us pretty grounded in our celebrations for the time being.”
In terms of April’s regional data highlights, the smaller Great Plains region observed a pronounced 33.3percent jump in endorsement levels to 52 loans for the month of April. The Rocky Mountain region saw a 23.3 percent rise to 296 loans, while the Northwest/Alaska region grew 19.8 percent to 224 loans.
High-performing lender highlights include Liberty Home Equity Solutions recording a 53.1 percent rise to 222 loans, marking “their highest volume in over a year on this report,” Lunde says. Longbridge Financial also saw a pronounced endorsement increase of 30.2 percent to 56 loans. Synergy One also rose by 20 percent, settling at 162 loans.
Read the full HECM Lenders report for March at RMI for specific breakdowns and detailed regional performance data.