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Historically-low interest rates have pushed up HECM-to-HECM refinances to nearly one-third of all loan volume. Originators share their thoughts on what the refi boom means for our industry.
Canada’s reverse mortgage spokesman is in- All in
US mortgage rates hit another record low
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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.
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2 Comments
If the HECM refi boom resulting from low interest rates was resulting in INCREMENTAL business on top of a surge in NEW originations stemming from the same factor, I would be encouraged about the “strength” of the reverse market. As it is, the refis appear to be REPLACEMENT volume allowing the industry to continue to tread water. Aside from a rising tide in the H4P segment, I am seeing few signs of encouragement re the adoption/use of reverse mortgages as other than needs-based product.
Jim,
Your points are well taken with one exception. The national increase in H4P endorsements, for this fiscal year over last, is projected to be about 136 H4P endorsements. Yet on a regional basis, that percentage will vary.
Currently, total HECM endorsements are projected to be about 40,944 for this fiscal year (ending September 39, 2020) or approximately 30.9% greater than total HECM endorsements for last fiscal year (ended September 30, 2019) with its 31,274 total HECM endorsements. That percentage increase is composed of an increase of 0.4% from H4Ps, 10.4% from Traditional HECMs, and 20.1% from HECM Refis. On the other hand, if we just look at H4P endorsements for last fiscal year of 2,282 and compare that to the projected H4P endorsements for this fiscal year 0f 2,418, H4P endorsements, that percentage increase is about 6.9% greater this fiscal year over last. The most recent data gives a slightly better picture for this fiscal. It shows that even if HECM Refis for this fiscal year were the same as last fiscal year, total HECM endorsements would have ended up being almost 11% higher than the total HECM endorsements for last fiscal year which better than projected even a few weeks ago.
All projected endorsement information for this fiscal year is based on the most recent HECM endorsement and HECM case number assignment data available to the public on HUD’s website (plus an assumed conversion rate of 67% for the percentage of applications with assigned case numbers assigned that are expected to become HECM endorsements).