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Reverse Mortgage Endorsements Spiked in March, But There’s a Catch

Reverse mortgage endorsements grew by 21% in March from the previous month, but the result could be more about timing than organic growth in demand for Home Equity Conversion Mortgages.

According to data from Reverse Market Insight, Inc., lenders endorsed 5,364 loans last month, good for the second-highest monthly total notched over the last three years. Still, the Dana Point, Calif.-based research firm warned that Federal Housing Administration application volume hasn’t risen at the same clip in recent months, meaning the March gain could just be the release of an endorsement bottleneck.

“That said, there are still some interesting nuggets to be found in this month’s report,” RMI noted, pointing to regional growth in nine out of the 10 areas it tracks — and the lone holdout, New England, saw just one fewer loan endorsement in March than in February.

The Pacific/Hawaii region led the way with 1,608 endorsements in March, including 934 endorsements in Los Angeles, 781 in Santa Ana, Calif., and 739 in San Francisco. As RMD has reported in recent months, the Mountain West and Pacific regions have shown the fastest HECM growth in recent months: Denver saw a 76.5% growth in reverse mortgage endorsements according to the most recent RMI data, with a 32.8% gain in Seattle and a 25.2% rise in Portland, Ore.

As is generally expected, American Advisors Group topped RMI’s list of the largest 100 lenders in year-to-date endorsement volume, with 3,194 so far in 2017 — a full 452 more than at this point in 2016, or 16% yer-over-year growth. The Orange, Calif.-based industry giant also recorded its ninth-largest volume month on record in March 2017, according to RMI.

Liberty Home Equity Solutions claimed the number-two spot with 1,139 loans so far this year, a modest 2% gain from last year, but Reverse Mortgage Funding was close behind in third with 1,132. That’s good for a whopping 95% gain over its volume at this point in 2016, when the Bloomfield, N.J.-based firm had only 580 loans. RMF has also increased its market share by 77% in that timeframe, while AAG has captured 5% more and Liberty lost 8%.

Finance of America Reverse and One Reverse Mortgage rounded out the top five, though Synergy One Lending is hot on One Reverse’s heels: the San Diego-based firm saw a 43% jump in market share and a 58% gain in volume from last year.

RMI’s monthly HECM Lenders reports provide rankings for FHA-approved firms only, with the HECM Originators list also including non-FHA approved companies.

Written by Alex Spanko