December 2018

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This report was compiled from data courtesy of Reverse Market Insight.
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4 comments

The Positive Realist January 4, 2019 at 12:52 am

The ultra optimists in the industry are calling the current endorsement situation a rough road of recovery. They are so bold as to call the last ten years, recovery. What nonsense!!

What we are experiencing is another fiscal year of loss. Following our best fiscal year for endorsements, fiscal 2009, we had three straight years of loss followed by six years of slightly downward peak to valley secular stagnation and now after stagnation we are once again experiencing a fiscal year of loss.

As a realist, who is trying to see the positive, 1,751 endorsements is retched. Of course, most of us know that the Government Shutdown began on 12/22/2018 at midnight. If shutdown had not occurred there would have been 21 working days for HUD in December 2018 but as it was there was only 16 working days. That means HUD processed about 110 HECMs per day. Using the extrapolation method John Lunde has employed in similar situations, that means that HUD should have endorsed a total of about 2,310.

Not since January 2004 has there been endorsements lower than either 2,310 or 1,751; the endorsement count for January 2004 was 1,572. The month before (November 2018), the endorsement count was 2,551 which was the lowest such count since also January 2004. Yet people like John Lunde call this nothing more than a rough road of recovery. When endorsements have fallen for two months in a row to their lowest endorsement count in almost 15 years that sounds something more than a “rough road.”

We keep hearing that the industry will need fiscal 2019 before it can return to recovery. Yet what evidence is there that fiscal 2020 will be an improvement over 2019? We hear about how wonderful it is going with financial advisers and Realtors but when will all that wonder result in higher endorsements? If PLFs must be restructured or just outright reduced yet further will we see more endorsements in fiscal 2020 than we see this fiscal year?

It is highly unlikely that if the government shutdown is over during this month that total endorsements for this calendar quarter will exceed 10,000 endorsements even with if the closed loans not processed in December 2018 are processed in this or the following two months. From industry leadership are cries that things are getting better BUT are they? Have we hit bottom? Neither the total endorsements for November 2018 nor those for December 2018 indicate that the bottom has been reached as RMI so kindly reminds us as it tries to eulogize every low we have reached since fiscal 2017.

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The_Cynic January 4, 2019 at 1:27 am

According to the RMI report less than 125 FHA Approved Mortgagees produced even ONE endorsement during December 2018. True the FHA working days for December 2018 were much lower than that for December 2017 BUT if things are getting better why would there be no endorsements for the Approved Mortgagees not included in the 100 Top Lender report? While that should turn around in fiscal 2019, will either fiscal 2019 or fiscal 2020 reach at least 40,000 endorsements? If not, then this talk of recovery must be exposed for what it is — HECM lenders cannot endure the loss of even more originators due to their inability to locate the alleged demand they claim exists for HECMs. It seems the only age group where HECM demand exceeds that of those 62 and older is among those who are under 50; for more details on the demand for those under 50 see https://reversemortgagedaily.com/2019/01/03/survey-finds-reverse-mortgage-appeal-higher-among-those-under-50/.

May 2019 be a prosperous year for all of those originators still originating HECMs.

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Government Shutdown, Endorsement Plunge & Outlook | HECMWorld.com January 7, 2019 at 1:01 am

[…] of federally-insured reverse mortgages endorsed in the month of December was just released. A record low 1,751 Home Equity Conversion Mortgages were endorsed. For some perspective December endorsements totaled 4,765 in December 2017, 4,658 in 2016, and […]

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2018: A tumultuous year for the reverse mortgage | HECMWorld.com January 8, 2019 at 1:01 am

[…] not anticipating a blockbuster month for HECM endorsements. However, many were taken aback when December endorsements came in at a meager 1,751 units. Even factoring in the government shutdown which halted […]

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