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October Top 100 HECM Lenders Report
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To be clear, the October 2022 HECM endorsement volume is the second worst monthly volume seen since April 2020. Only September 2022 endorsement volume was lower in that time period. For further comparison purposes the average monthly HECM endorsement volume in fiscal 2022 was 5,374. What is bothering is that the HECM monthly endorsement volume in the last two months has NOT reached 3,600 HECM endorsements.
So once again the question becomes, how much of last month’s volume comes from HECM Refis? Since most of the October 2022 comes from applications that received case number assignments in June and July 2022, Refi volume could be over 700 such endorsements indicating that originators having more trouble adjusting their businesses to a first time borrower environment than most in this industry promoted less than three months ago. So when will the Refi surge in endorsements go down? Until more information is available it is likely it is already at the industry average of 542 per month. With the caveat that it could go relatively lower than the monthly average based on projected increasing HECM expected interest rates.
The bright side is that although the modified, annualized conversion rate dropped slightly, it is still above 77% and the third highest such rate since April 2009. This indicates that although volume is low, conversion rate efficiency remains high.