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   James E. Veale, MBT

   April 3, 2023 at 11:34 pm

   Through the first six months of fiscal year 2023, there have been just 18,020 total HECMs endorsed. That is THE worst start for the first six months for ANY fiscal year since March 2004 which makes the first six months of fiscal year 2023 the worst such start for any fiscal year in the last 19 fiscal years. The total HECM endorsements for the first six months of fiscal year 2019 (our worst fiscal year for HECM endorsements since 2003) was 18,517. The case number assignments for January 2023 is only 3,186 and with a pull through rate of about 75%, one should not expect much more than 2,400 HECM endorsements next month, which is less than the 2,901 HECMs endorsed in April 2019.

   The endorsement volume for March 2023 seems to be more of a lender delay in taking HECMs to HUD for endorsement than problems at HUD endorsing HECMs. Specifically, the mass movement of originators from RMF, AAG, and Fairway would most likely have meant delays in normal closing periods due to the need to transfer case numbers to the new lenders. It is also most likely due in part to reductions in administrative staffs at many lenders caused by the exceptionally low HECM endorsement production in the last six months compared to the HECM production in the last six months of fiscal year 2022. Other causes could have entered into the equation but these two stand out in particular.

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