Single Women Increasingly Getting Reverse Mortgages, Counseling Certificates Double Endorsements

The average age of a Home Equity Conversion Mortgage (HECM) borrower at the time of a loan’s origination remains in their early 70s, while as many as 40% of all HECM borrowers between 2009-2019 are specifically single females. This was just some of the data shared by members of the U.S. Department of Housing and Urban Development at the National Reverse Mortgage Lenders Association Annual Meeting in Nashville, Tenn.

Other illuminating data points shared by members of the Department included that just over half the amount of HECM counseling certificates issued actually resulted in the endorsement of a new loan, while there are also over a quarter of a million active HECM adjustable rate loans indexed using the LIBOR standard.

Single women as a growing share of HECM borrowers

In fiscal year 2019, 31,260 HECM loans were endorsed by the Federal Housing Administration. This figure represents a low over the course of the last two fiscal years, according to Dr. Joshua Miller, senior advisor in the office of the deputy assistant secretary for single family housing at HUD. In terms of the composition of HECM borrowers, the data is divided into three separate categories: instances where there are multiple borrowers, single female and single male borrowers, respectively.


In 2019, 39.7% of HECM endorsements were for multiple borrowers, 38.04% were to single females, while 21% were to single males. While the different classes of borrowers remained relatively consistent throughout the year, the disparity between single females and single males as HECM borrowers is following through on notable trends that originators had observed in their daily course of business previously.

“There is no doubt there is a heavy weighting toward single women doing HECMs,” says Howard Frankel, senior reverse mortgage loan officer with Resolute Bank in Naples, Fla in a late 2018 interview with RMD. “Especially women who are older, who might be in their upper 70s and who have lost a husband recently.”

Frankel at the time observed that inquiries about reverse mortgage options were coming more and more from women in their 70s, who had perhaps recently lost a husband and were exploring their options in terms of finances, he said at the time.

The HECM data shared by HUD could indicate that this is a growing segment of potential reverse mortgage customers, particularly due to the high concentration of single women growing to reach within 1.3% of matching the dominant demographic of senior couples who avail themselves of a reverse mortgage product.

Loan characteristics, H4P and refinance trends

In terms of loan characteristics by purpose, the far and away most dominant reason to get a HECM over the past decade has consistently remained in the traditional arena, while refinance activity has seen something of a roller coaster of “valleys and peaks,” as Miller describes it.

“You have movement across this time period, and refinance activity is really going to fluctuate based on economic conditions like interest rates and house price appreciation,” Miller says. “To some extent, policies may also affect refinance activity. However, the last two years has seen a decrease in overall refinance activity.”

Interestingly, however, fiscal year 2019 did see relative parity between HECM refinance transactions and HECM for Purchase (H4P) activity. Unlike refinances, H4P endorsements have been steadily increasing over the period between 2009-2019.

“The For Purchase shows a different trend, we’ve seen it increase quite significantly over this period of time between 20019 and 2019,” Miller says. “In FY 2009, the share [of H4P transactions] was 0.84%, and that has increased to 7.4% for the latest fiscal year. The takeaway from here is that there are fluctuations in terms of refinance activity, and then a steady growth in terms of the HECM for Purchase.”

Counseling certificates outnumber HECM endorsements

Another trend raised by HUD staff presenting at the conference related to reverse mortgage endorsement certificates, as pointed out by Erica Jessup, acting director of the home valuation policy division in the Office of Single Family Housing at HUD. According to the data, 60,082 HECM counseling certificates were issued in fiscal 2019, compared with 31,260 endorsements that same fiscal year.

“You’ll notice that in fiscal year 2019, there were over 60,000 HECM counseling certificates issued. And, for the number of endorsements, a little over half [of that figure reached the endorsement stage],” she explains. “I always like to point that out, because it gives you an opportunity to see that sometimes, after someone obtains counseling, they don’t always go forward with the program.”

This is not an indication of a negative attribute on the part of FHA or the requirements of the HECM program, she says. Rather, the counseling is likely doing its job by helping borrowers to realize that the reverse mortgage product may not end up being a good fit for this potential borrower after all.

“Sometimes, they just realize that this [product] isn’t a good fit for them,” Jessup says. “And that’s okay. Or, maybe they found an alternative means in order to have their short-term needs met, because maybe from a long-term perspective, the HECM just doesn’t work for them. So, this is always useful information to have.”

Also detailed as possible causes for the discrepancy between the amount of counseling certificates disbursed and the endorsement total is lag time between receipt of the certificate, potential eligibility issues, and the client’s decision not to pursue a HECM, the presentation detailed.

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  • This article is very interesting. It tells me there is potential business out there by focusing on woman organizations and those geared toward the senior population.

    Sure, it means getting out, doing research, making calls, networking, things many of us are used to and have done. To many originators in the reverse mortgage space are relying to heavily on their companies supplying leads to them or buying leads from lead companies.

    Today in order to be successful, an originator needs to get out there and hit the Road. Call on small community banks, funeral homes, health care providers, elder law attorneys and hold educational work shops, team up with an elder law attorney and a health care provider, lots of opportunities doing these things!

    John A. Smaldone

  • Measuring counseling certs received in a twelve period of time to the number of endorsements in that SAME period makes little sense. In the HUD Report to Congress on the MMIF for fiscal 2018, HUD provided a schedule showing the percentage of HECMs endorsements in fiscal 2018 which had the PLFs in effect before 10/2/2017.

    What was amazing was that the HUD percentages meant that in September 2018, there 28 endorsements that had HECM Case Numbers assigned BEFORE 10/2/2017. As we all know before a HECM Case Number can be assigned, the borrowers have to complete counseling and a completed application submitted to the lender. In fiscal 2018, 51.25% of the 48,359 endorsements had HECM Case Numbers assigned before 10/2/2017!

    We know that the total HECM Case Numbers assigned in September 2017 were the largest ever assigned in a single month but still the total was only 20,400 and total HECMs endorsed in fiscal 2018 with HECM Case Numbers assigned before 10/2/2017 were 24,784. With an annualized but modified conversion rate for fiscal 2018 of 63.8%, that means about 11,768 of the HECMs endorsed in fiscal 2018 with HECM Case Numbers assigned before 10/2/2017 had to have had their case numbers assigned before September 2017.

    So using a FIFO (the first in are the first out) system of accounting for endorsements, that means that it was not until January 2018 that about half of the endorsed HECMs that received HECM Case Number Assignments in September 2018 completed endorsement. (This verifies that the four month lag rule of thumb which states that it takes four months for the average endorsed HECM to go from HECM Case Number Assignment to being endorsed still has relevance in fiscal 2020.)

    Thus comparing endorsements in a twelve month time period to the HECM counseling certificates in that same time period is a rather unsophisticated approach to understanding the percentage of HECM certified counselees who get an application and ultimately close the HECM and those HECM certified counselees who do not.

    What the article does not address is if the rate of those who go through counseling and get a HECM is 50%, what has caused the fall out rate for those becoming certified counselees to rise to 21.7% from just 10% a few years ago. For example, if there are 60,000 counselees certified in the next twelve months, the RMD article is implying only 30,000 would ultimately obtain a HECM in the following twelve months. If the modified and annualized conversion rate for HECMs with case number assignments is 30,000 then 47,000 of the certified counselees would have had to complete an application and get a HECM Case Number, leaving 13,000 certified counselees who did not complete an application and get a HECM Case Number assigned. 13,000 is 21.7% of 60,000.

    So once again why is there a greater than 100% increase in certified counselees dropping out even before completing an application and getting a HECM Case Number assigned a good sign for the industry? We heard the same story about improved counseling when the drop out rate was closer to 10% as determined by ones who follow counseling cert data.

    What is surprising about the report is not in its unsophistication but a lack of specific identification related to the actual conversion rates. HUD has all of the data it needs to make such calculations but instead it resorts to poor estimations. In understanding its own data, HUD seems to be going backwards.

    H4P has done little since fiscal 2013. That year it reached a peak of 2,097 before falling to 1,807 in fiscal 2014. In the following four years, total H4P endorsements ranged between 2,346 to 2,610 before falling to 2,282 for fiscal 2019. H4P is a huge disappointment in relation to its description as the sleeping giant of the industry. There is no question that H4P is sleeping but there is no statistical sign at HUD that shows it is a giant. Yes, there are some originators who spin great tales about so many seniors obtained a new home last year and we should have this percentage of them and on and on. Myths always sound interesting if the teller is convincing in the presentation. If memory serves me rightly the story of a sleeping giant was also a myth. If stats won’t back you, then it seems to many in our industry, we need to add to our credibility and observed integrity by making up stories that rise to the level of myth. As to H4P, that seems especially true.

  • As to the percentage of single women getting HECMs, in fiscal 1990, that percentage was 57.3%. From fiscal 1990 to fiscal 2009, the percentage of single women obtaining HECMs ranged from 41.4% to 57.7%. Those were the decades for single women.

    In the last decade, the percentage of single women has ranged from an all time low of 37.0% (fiscal 2016) to 42.6%. Last fiscal year the total percentage was the fifth LOWEST percentage of single women getting HECMs of all time at just 38.2%.

    So I have no idea why everyone should go out and focus on single women. Just like it is odd to read about focusing on funeral homes. Even John Luddy who was a funeral director is not telling us the next gold vein is there. One should work with what is working for them best right now. Just remember the fields are not always as green on the other side of the mountain as some say. Occasionally reaching out to find new sources of reverse mortgages should be part of our routine not jumping from something that works now to something that worked a decade ago.

    While current stats are interesting, one must also keep some perspective on where we are in relation to our own statistical history. I have argued this point with H4P advocates for most of the last decade. Today it is so obvious that H4P is a difficult product to emphasize even though when it works, it can be very rewarding.

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