Home Equity Conversion Mortgage (HECM) endorsements decreased by 13.6% to 3,386 loans for the month of February 2020, a slight dip compared to the prior month, which recorded the highest endorsement levels since February 2019. The majority of the top 10 lenders recorded endorsement decreases, while 7 of 10 tracked regions were down, as well. This is according to the February HECM Lenders report compiled by Reverse Market Insight (RMI).
“HECM endorsements declined -13.6% in February, moderating the blistering January pace but still well above levels from early 2019,” said RMI in its commentary accompanying the new data.
Of all of the recorded regional activity, the Great Plains region saw the most pronounced increase of 17.9%, but since it is the smallest active region among the 10 that are regularly recorded, that increase was to 66 loans. The Rocky Mountain region followed with an increase of 6.8% to 424 loans, continuing its generally higher levels of activity compared to its figures one year ago, where its monthly total for March 2019 was only 240 loans.
The Southwest region also recorded a modest gain of 4.8%, settling in February at 308 loans.
The average total, while a dip compared with figures from the previous month, are still generally positive according to New View Advisors.
“[This month’s total] is lower than last month’s 3,919, but adjusted for day count a very strong number considering the previous 12 months averaged fewer than 2,900 units,” said New View in its February 2020 HECM Endorsement Analytics blog post.
Four of the top 10 lenders managed to record increases, some of them being quite notable this month. Percentage-wise, the lenders were led by Fairway Independent Mortgage, which recorded an increase of 61.3% to 150 loans, its highest monthly showing since January 2018. It was followed by Finance of America Reverse (FAR), which rose 27.3% to 280 loans.
However, the most notable increase among the lenders was for Liberty Home Equity Solutions, which rose by 22.5% to finish February with 582 loans, its highest monthly total since March 2014, according to RMI. Notably, one of the lenders that recorded an increase in its endorsement figures was One Reverse Mortgage, rising 8.8% to 180 loans in February. One Reverse recently halted its reverse mortgage origination operations at the direction of its parent company Quicken Loans, and One Reverse personnel were reassigned to other parts of the organization.
According to the U.S. Department of Housing and Urban Development (HUD)’s January Endorsement Snapshot Report as analyzed by New View, Liberty Home Equity Solutions sponsored 501 loans originated by another lender, followed by FAR (333 loans), American Advisors Group (AAG, 264) and Reverse Mortgage Funding (RMF, 263), respectively. Fairway sold 93 loans to a different sponsor, while Ennkar sold 63.