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Just how is the HECM for Purchase performing? That’s a question that RMD addressed last week sharing the perspectives of several industry lenders.
Reverse Market Insight’s Market Minute
The housing boom could be losing steam
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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.
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While we may not be seeing sloping downward sloping peak to trough secular stagnation when it comes to total monthly HECMs, we are seeing this trend when it comes to first time HECM borrowers (those new borrowers who are not doing HECM to HECM Refis). What this says is that not only are H4Ps stagnating but even more Traditional HECMs (as HUD calls them) are even doing worse.
Yet we hear how great the industry is doing. We hear this about financial advisers in particular. If HECM facts are established through endorsements, then endorsed HECMs from referral sources are not doing well either. It has been years since the industry has freed itself of the shackles of stagnation. It started in fiscal 2013 and was with us until 2017. In 2018, endorsement losses crushed the industry.
Like the irrational cries of succeeding with financial advisers, we are hearing that the industry have a total 65,000 HECM endorsements for this calendar year. But let’s look at the stats. For the first seven months of this calendar there have been a little less than 30,000 HECM endorsements To get to 65,000 total HECM endorsements for calendar 2021 we need over 7,000 HECM endorsements for each of the next five months That is to dream the impossible dream. The last time that the total HECM endorsements for five months exceeded 35,000 was the five months that ended February 28, 2010.
There have only been two months where HECM case number assignments exceed 7.000 and the biggest of those was 7,556. In the last 12 months the average for HECM case number assignments is about 6,200 and with annualized but modified conversion rates hovering around 73%, HECM case number assignments would have to be about 9,600 per month, The people who make such claims have been known as the ultra optimists for years.
When something seems to be too good to be true, well about 95% of the time,…