Three factors that will shape the HECM in 2020
What is presently shaping reverse mortgage production today, and what will influence our future?
First is the ‘feeder’ of all reverse mortgage endorsements. Before any federally-insured reverse mortgage is underwritten, has funds disbursed or is ultimately insured or ‘endorsed’ it begins as a case number- the identifier attached to every submitted HECM application. While most closely follow our monthly Top 100 lenders report, many are not looking at the leading indicator of future endorsement volume- Case Number Assignments– or perhaps a better term would be ‘reported applications’.
Case numbers aside the largest factor to influence future loan volumes is what HUD says or doesn’t say in the coming months. Traditionally August or September have heralded upcoming changes for the following federal fiscal year which begins each October. Will we see another round of cutbacks to the HECM’s principal limit factors, or another layer of loan requirements? While recent comments from FHA Commissioner Brian Montgomery show confidence in the improving financial health of the HECM program, there’s no denying the continued drain from previous HECM loans on the FHA’s insurance fund.
FHA’s 2nd Quarter report to Congress on the Mutual Mortgage Insurance Fund shows 2018 HECM claim payouts are on track to exceed 2017 by over