Dan Hultquist is well known in the reverse mortgage industry as a leader, author, and analyst of trends in the Home Equity Conversion Mortgage marketplace. We had a chance to ask Dan about recent developments in our market…
Don Graves has not only built a successful reverse mortgage business in Philadelphia, but he is also perhaps one of the most encouraging and inspiring individuals I have had the pleasure to call a friend in our industry. We will be discussing his approach to marketing, networking with financial pressures, and maintaining perspective as a HECM professional…
If there’s one thing many media outlets practice it is selective reporting of facts, willful omission, dividing Americans by race or economic class, and fear-mongering to garner clicks to increase ad revenues. Such are the criticisms that come to mind when reading USA Today’s most recent expose on reverse mortgages. Sadly such journalistic practices are not uncommon…
Watch for a round-up of this week’s top reverse mortgage news stories.
Download the full report [pdf]
We expect to see now-exited Live Well Financial’s loans in the report for the next 3-4 months as their pending pipeline of loans are insured. May endorsements are down 8% month-to-month but volume is only down modestly when considering the second half of FY 2018. We have the same top-ten lenders in May as in April with some minor ranking changes. YTD endorsements are down 39% from May 2018.
This report was compiled from data courtesy of Reverse Market Insight.
The unexpected news of the Congressional Budget Office’s report on reforming the HECM program created quite a splash among industry watchers. As the initial shock of the government watchdog’s recommendations sinks in, some are reading between the lines. One of the subtexts I missed are the political origins of the CBO report itself…
In August 2016 AARP recommended the elimination of the HECM ‘line of credit’
While FHA recent reports show a positive financial outlook for the fiscal year 2020, the CBO issued a report today proposing 4 major potential reforms to the HECM to reduce long term risks to the taxpayers. The Congressional Budget Office provides budget and economic data to Congress or the legislative branch which sets their priorities. In essence, they are the watchdog for the nation’s purse.
1-Make FHA a direct lender. Under this proposal, lenders would do the leg work or marketing and originating the loan, while FHA would make the disbursements directly to the homeowner. In addition, the government would service the loans. The CBO acknowledges significant drawbacks in scaling to manage a large number of loans…
Two months ago we asked if private reverse mortgages would stop the slide in our industry’s overall loan production with the increasing popularity of the jumbo or proprietary- this as the HECM’s volume has dropped considerably.
That question was raised again most recently in Reverse Mortgage Daily, but with a twist. One of the more interesting observations in that piece comes from the director of Cambridge Credit Counseling. Jennifer Cossentini said, “I do think there is a strong possibility that the reverse mortgage landscape that we know now will flip in the next few years. I think the proprietary products have the potential to evolve and change to fit the consumer’s needs much faster than the HECM can.”
While private lenders can be much more responsive in meeting older homeowner’s needs, presently only those in higher-valued can benefit from proprietary products.
But do private or proprietary jumbo reverse mortgages truly compete with the HECM? It’s really not a question of one loan versus the other, but rather how each may complement each other in terms of total industry volume. So where can the jumbo reverse provide relief?
This week, reverse mortgage stories from across the web…
It’s been quite some time since a top-ten HECM lender has left the industry. The news of Live Well Financial’s sudden exit from reverse mortgage lending last Friday left many somewhat stunned. But in fact, the company is ceasing all origination activities for both forward and HECM loans.
In the most recent Top 100 HECM Lenders Report for April, Live Well posted 74 loans, 350 for the year to date (Jan-April). If you compare their 2018 production in the same period you may see one of the reasons for their exit. In April 2018 Live Well had 114 endorsements with 605 HECMs endorsed that calendar year to date.
While many may find the news unsettling, the exit of Live Well was thought by some to reflect a more organic response to an ever-changing market. Just one short year ago the lender announced their intent to emphasize forward or traditional lending, which the company had been originating since their founding in 2005.
The reasons behind the lender’s sudden shutdown were unclear until the Richmond Times-Dispatch published an excerpt yesterday from the company’s notice filed with Virginia employment officials.
“This reduction in credit availability combined with challenging conditions in the markets for mortgage loans, which were conditions outside of the company’s control, along with related regulatory issues, have resulted in the company having insufficient available cash to continue operations”, the notice stated. The cash-crunch was triggered by sudden and unforeseen market changes in specific financial assets the lender used as collateral in gaining credit.
Such credit arrangements are common in mortgage lending and servicing.
Live Well’s exit while disappointing should be kept in perspective noting the unique and specific challenges that triggered the closure of both traditional and reverse operations.
