Our exclusive interview with the nation’s top-producing HECM originator
Are there any HECM loans to be closed in today’s market?’ Challenges notwithstanding there are so we interviewed the nation’s top-producing reverse mortgage originator George Vrban to learn more.
Shannon Hicks
Editor in Chief: HECMWorld.com
As a prominent commentator and Editor in Chief at HECMWorld.com, Shannon Hicks has played a pivotal role in reshaping the conversation around reverse mortgages. His unique perspectives and deep understanding of the industry have not only educated countless readers but has also contributed to introducing practical strategies utilizing housing wealth with a reverse mortgage.
Shannon’s journey into the world of reverse mortgages began in 2002 as an originator and his prior work in the financial services industry. Shannon has been covering reverse mortgage news stories since 2008 when he launched the podcast HECMWorld Weekly. Later, in 2010 he began producing the weekly video series The Industry Leader Update and Friday’s Food for Thought.
Readers wishing to submit stories or interview requests can reach our team at: info@hecmworld.com.
2 Comments
(Shannon, thanks for having George as your guest. What a refreshing voice in this era of general decline. George thank you for sharing your story with us.)
George is one of those in the industry who proves the rule. His work ethic and solving prospect problems are admirable. It is great to hear his production model does not rely on cold calling but rather referrals from a source this industry has by and large failed to cultivate and harvest.
There are four basic eras in this industry.
1. The first went from fiscal year 1990 to fiscal year 2001. In that 12 year period, the first two years had annual HECM endorsement counts of less than 1,000 and the remaining 10 years had annual HECM endorsement counts of less than 10,000.
2. The second era went from fiscal year 2002 (with just 13,049 HECM endorsements) to fiscal year 2009. That era was a strong period of growth where generally the rising tide lifted all boats. The last three of those fiscal years saw annual HECM endorsement counts climb from 107, 558 in fiscal year 2007 to 114,692 in fiscal year 2009 (almost 8.8 times the size it was for fiscal 2002). This era was marked by the addition of celebrities as industry spokespeople, particularly the impact of the ads with Robert Wagner who NRMLA recognized for his service to the industry at a national convention.
3. The third era started with fiscal year 2010 and ended eight years later with fiscal year 2017. This era was marked by decline with fiscal year 2017 having less than one-half of the HECM endorsements (at 55,292) of fiscal year 2009. While some of this decline may have resulted from the mortgage bust of 2008, most resulted from 1) lower PLFs caused by the corrections HUD tried to make due to the financial transparency resulting from the required switch of accounting for HECM insurance to the MMIF beginning with HECMs endorsed on 10/1/2008, 2) the addition of new borrower safeguards, and 3) the beginning of the decline in HECM endorsements related to celebrity endorsements. This latter decline occurred despite the substantial increase in the statutory MCA retroactively to January 1, 2009.
4. The current era is one of further decline. It started with fiscal 2018. It has been negatively impacted by the reduction to PLFs that went into effect on 10/2/2017. Some point to the change in MIP as well, still others, the reduction in the PLF/expected rate floor, and others to all three or some combination thereof. The three worst fiscal years for HECM endorsements since fiscal year 2003 were 2024 (the worst), 2019 (second worst), and 2023 (third worst). Fiscal 2020 was also the fifth worst fiscal year for HECM endorsements since fiscal year 2003. Fiscal year 2024 did not total even 25% of the HECM endorsement volume seen in fiscal year 2009. It is also the era where interest rate changes have had what seems to be their most positive and negative impact. This era also had the best fiscal year for HECM endorsements since fiscal year 2012 but it became marred when as of September 30, 2023 HUD projected that the present value of future cash flows from this cohort would be over $800 million negative due principally to the substantially higher number of HECM Refis (highest ever) endorsed in that fiscal year.
With some on Wall Street predicting that very soon the 10 year CMT will increase to over 5% and with no let up on the 10 year CMT interest rate rising beyond what it was on September 18, 2024 despite the Fed announcing a 50 basis point reduction of its interest rate on that date, there are a lot of questions as to whether HECM Refis will substantially increase in this fiscal year or not and whether we will see that the 10 year CMT rate fall below the rate it was on September 18, 2024 before September 30, 2025.
If we all had the tenacity, work ethic, and skill of George, no doubt we would see much better HECM endorsement totals each fiscal year.
Thank you Jim. George certainly embodies the solution-focused approach. And thank you for the historical perspective on HECM endorsements.