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Go West, Young HECM: Reverse Mortgage Volume Grows in CO, TX, CA

Western states continue to drive reverse mortgage origination growth in the United States, according to new data from Reverse Market Insight, Inc.

Month-to-month comparisons of Home Equity Conversion Mortgage endorsement growth may not necessarily reflect big-picture trends in the reverse mortgage industry, but RMI’s January regional data presents a good picture of where the industry is heating up after a lackluster 2016.

“HECM endorsements started the year off higher than last January, which makes for a lot of good growth comparisons around the country,” RMI noted in its data commentary. As RMD reported earlier this month, overall HECM endorsements rose 17.7% from January 2016 to January 2017, though the overall numbers masked a month-to-month drop in wholesale endorsements from December 2016 to January 2017.

Of the top 10 states by endorsement volume, eight saw gains from January 2016, with a jump of 84.8% for Colorado, 54.9% for Texas, and 34.8% for Florida; only North Carolina and New Jersey had declines, of 2.8% and 15.0%, respectively.

Over on RMI’s top-10 list of cities by volume, several southern and western locales posted impressive gains: Endorsements in Las Vegas were up 185.7%, while San Antonio HECM endorsements rose 150.0% and volume in San Diego was up 53.1%.

RMD noted a potential connection between growth in the Western states — which continue to represent the most consistent areas of gains in RMI’s endorsement heat map — and generally rising home equity levels on the left coast and in the Mountain West states in a piece published earlier this month.

It’s important to note that the small numbers at play this early in the data year contribute to the high percentages; for instance, Las Vegas earned its 185.7% increase by turning in 40 HECM endorsements, while San Diego’s 53.1% gain came from 49 loans.

They also reflect rises from a historically bad January 2016, when just 3,889 mortgages were endorsed, compared to 4,936 in January 2015.

Back in the present, HECM refinances accounted for 13% of endorsements in the first month of 2017, the same percentage as January 2016 but a 20% gain in absolute volume numbers. Familiar names still populate the list of top 10 reverse mortgage lenders, but Reverse Mortgage Funding leapt three positions from this time last year to claim the number-two spot behind American Advisors Group and one notch ahead of Quicken’s One Reverse Mortgage.

Written by Alex Spanko