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FHA Sees Reverse Mortgages As Growing Percentage of Volume

While overall Federal Housing Administration loan volume is expected to fall over the course of the next two years, FHA predicts its reverse mortgage volume to remain relatively steady. The most recent public FHA projections, included in an actuarial review of the agency’s mutual mortgage insurance fund in late 2011 estimated reverse mortgage volume near 75,000 loans in 2012 and 2013, comprising a growing percentage of the administration’s overall portfolio.

The Department of Housing and Urban Development has since revised its reverse mortgage projections down slightly for 2012, HUD representatives told attendees of the National Reverse Mortgage Lenders Association eastern regional conference in March, but compared with the totals for forward FHA lending, the proportion of HECMs still stands to rise.

Chart: FHA Volume: Forward and Reverse


FHA Volume: Forward and Reverse

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The reverse mortgage estimates compare with “forward” purchase and refinance volume of near 1.2 million loans in 2011 to less than 800,000 in 2013. Recent changes made to FHA’s lending programs including insurance premium raises for forward loans are working to encourage private capital back into the market.

Written by Elizabeth Ecker