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With all traces of the Dec/Jan government shut down and lagging endorsements having worked their way through the system- April endorsements should give us a good idea as to what the new norm will be in HECM endorsement volume.
This report was compiled from data courtesy of Reverse Market Insight.
1 Comment
Due to the historical and reasonably accurate four-month lag rule that states it takes the average endorsed HECM four months in which to go from case number assignment to endorsement, there is but one month left in which to gather new HECM applications which will most likely become endorsements before October 1, 2019, the start of fiscal 2020.
Even though the endorsement total for April 2019 is 12% higher than the total for March 2019, it is the lowest endorsement total for any April in well over a decade. Not only is it highly likely that secular stagnation ended on September 30, 2018, but it has ended due to an approximate 32% loss in endorsements when compared to fiscal 2018. That would make fiscal 2019 the worst percentage HECM endorsement loss fiscal year in the history of our industry (i.e., obtained by comparing the percentage change in HECM endorsement production of one fiscal year to that of the immediately prior fiscal year). It would also mean that HECM endorsement production for fiscal 2019 is less than 30% of the HECM endorsement production for fiscal 2009 (which was the best year for HECM endorsement production).
While such stats are annoying, they are also the stubborn things that our second President, John Adams, describes when he writes: “Facts are stubborn things and whatever may be our wishes, our inclinations, or the dictates of our passions, they cannot alter the state of facts and evidence.”
Everyone in the industry seemed to jump on the bandwagon and root when endorsements were rising. Those who presented those results and predicted even higher results in the future received a hero’s welcome in return. Now that facts and evidence have haunted us this last decade as they have, all those who present them as they are, get treated as negative and pessimistic. While a growing HECM marketplace seems to validate the claim that seniors love HECMs, what does this marketplace prove?
If members of the industry look at those who report facts and evidence of a less popular product and a shrinking base of qualified demand as enemies of the program, then change the facts and evidence by growing the HECM world. Griping and complaining does not lead to growth.