The good news about reverse mortgage endorsement volume keeps coming, but as always, there’s a slight hitch to consider before declaring that the industry has awakened from a prolonged numbers slumber.
According to the latest data from Reverse Market Insight, Home Equity Conversion Mortgage originators generated 5,355 endorsements — including both Federal Housing Administration-approved lenders and their non-approved counterparts — in March 2017, the most recent month for which the statistics were available. That’s the best single month for endorsement volume since August 2013, RMI founder John Lunde told RMD in a phone interview Thursday.
March 2017 was also the first since December ’16 that saw both retail and wholesale growth from the previous month, with gains of 16.7% and 26.3%, respectively; in the early going of 2017, the channels had previously traded off gains and declines.
On its face, RMI’s “HECM Originators” report seems to bolster the positive news that has been trickling out of the Dana Point, Calif.-based research firm’s regular data updates. As RMD reported last week, RMI’s “HECM Lenders” leaderboard, which tracks only FHA-approved firms, showed nearly 800 more endorsements in April 2017 than at the same point in 2016; the all-inclusive HECM Originators report lags a month behind the FHA-only lenders list.
“It also adds a little credibility to March’s volume level, since any single month can be heavily influenced by one or two larger lenders catching up on endorsements,” RMI commented at the time.
When reached Thursday, Lunde reiterated that month-to-month gains or drops don’t necessarily signal a sea change in the industry’s endorsement fortunes, as they could simply be the result of a released backlog — and even two months strung together aren’t enough to declare victory over the industry’s volume malaise.
“I know I talked to a couple of lenders, and they were catching up on endorsements, loans that had they’d funded but just hadn’t devoted the manpower to get them endorsed,” Lunde said.
He also noted that he hasn’t heard of a related rise in demand for HECM counseling sessions or bumps in case number assignments, factors that could signal an end to the recent string of good news. Of course, we won’t know if this is a Potemkin push until much later in the spring.
“It was more sustained in April than I was expecting, so if we see May come in and be back down to the usual levels, then I think we’d call it endorsement catch-up,” Lunde said.
“I guess it’s possible that March jumped and might sustain us a little more,” he continued. “I would bet against it right now.”
See RMI’s full report here.
Written by Alex Spanko