2 Comments

1. 

   The Positive Realist

   February 1, 2023 at 2:38 pm

   The 2,489 HECM endorsement count for January 2023 is the third worst such count for any January in the last 20 years. The two that were worse were 1,572 HECM endorsements for January 2004 and then in the last five years, the 1,649 HECM endorsement count for January 2019. January 2022, the HECM endorsement count was 5,771 or 232% times what the HECM endorsement volume was for last month.

   Now we come to the total HECM endorsement cumulative count for the four month period ended January 31, 2023 which was the third worst such count at 12,048 in 20 years. The year to date count for the four months ended January 31, 2004 was 8,700, the worst such count in that same 20 year period. That same count for the four months ended January 31, 2019 was 9,043, the second worst such count in 20 years. In comparison, the four months ended January 31, 2022 produced 26,121 HECM endorsements or

   What should be seen as the common thread here is that the second and third worst HECM endorsement counts in 20 years, are now taking shape in the last five. Could the endorsements for fiscal year 2023 be the third worst fiscal year count in the last 20 years? With these kind of endorsement numbers (and even more telling HECM Case Number Assignments) there is a growing likelihood that might be the case. Even in 2017, it was felt that our worst years were behind us. It seems now instead that we have walked right into more of them.

   • Reply
   • Link
2. 

   James E. Veale, MBT

   February 9, 2023 at 12:07 am

   Get yourself prepared for the HECM CNA (case number assignment) news for December 2022 released last Monday by FHA.

   The total was just 2,690 CNAs. That is THE worst such total for any month since January 2003. When I presented that news yesterday morning to our little group of basically 27 unaffiliated industry members, one person thought I said it was the worst such total since 2013 but no, there has never been a lower monthly HECM CNA total in over 20 years.

   At our current modified and annualized conversion rate of 75.1203%, we should expect no more than 2,021 HECM endorsements from 2,690 HECM CNAs.

   Just isolating December 2022, we had 2,786 HECM endorsements and but only 2,690 HECM CNAs. Knowing that November 2022 had 3,269 HECM endorsements and 3,313 HECM CNAs, what is your impression of fiscal 2023 so far? Remember the HECM endorsement count for January 2023 was 2,489.

   My impression is that we have yet to see a single HECM origination stat over 3,000 since November 2022. One person at the Tuesday meeting put forth this rather optimistic view: “I believe that at least as to HECM endorsements, things will be better in April 2023.” Yet that participant did not state on what stat that rosy picture was based. While optimism is great, it is also little more than a wish when not grounded in fact.

   Months ago one prominent industry leader told us that we had hit bottom. During the huge downturn in HECMs starting in fiscal 2010 and ending in fiscal 2013 this same person predicted at least three times that the industry had hit bottom but none of those predictions were correct. Six months ago, another industry leader was telling me that he did not believe that the total HECM endorsements for FISCAL 2023 (ending 9/30/2023) would exceed 39,999. I was surprised by that prediction since this person is by nature optimistic. At the current CNA rate we are trending, the HECMs endorsed during CALENDAR year 2023 (ending 12/31/2023) could be less than even 30,000. The most significant variable right now appears to be interest rates. If those rates stay about the same or go up during the next seven months, it is very likely the HECM endorsements for calendar year 2023 will be less than 30,000.

   This is not a prediction of gloom and doom for the industry but it could mean more administration job layoffs throughout the industry. As the old saying goes: “A recession is when my neighbor loses his job but a depression is when I lose mine.” Unlike the South and based on over 30 years of history, the RM industry will rise again. The question that none of us can answer is when will THAT take place.

   • Reply
   • Link