January Top 100 HECM Lenders Report

 

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3,919 HECM loans were endorsed (insured) in the month of JANUARY 2020 with 20 more lenders producing 1 or more endorsements according to the latest data from Reverse Market Insight.reverse market insight dashboard market analysis

3 comments

James E. Veale, CPA, MBT February 4, 2020 at 4:21 am

While at first look, January 2020 looks like a gigantic improvement of 137.7% over January 2019, one must remember that the HECM endorsement count for January 2019 was artificially low because January 2019 was the final month of the partial federal government shutdown. The January 2020 HECM endorsement count was also 59.3% higher than the December 2019 HECM endorsement count. That may be the case in part due to the December holidays and HUD employee vacations. Still that seems unlikely as the full explanation full disclosure requires. No one has yet filled in the gap as to why the HECM December 2019 HECM endorsement count was so much lower than the January 2020 HECM endorsement count.

The January 2020 HECM endorsement count was the third lowest HECM endorsement count for any January since January 2004, 16 years ago. Also the fiscal year to date HECM endorsements as of January 31, 2020 was 12,516 but that was the second lowest such count since again January 2004. Remembering how much emphasis there was on the encouragement found at the NRMLA Convention about future growth in reverse mortgage closings, apparently that did not apply to HECMs.

Once again we see how the lack in reverse mortgage production that optimism without supporting data produces. There may be growth (?) in the proprietary reverse mortgage portion of this industry but the lack of verified and verifiable data means that we are reliant on that same optimism to give us appropriate encouragement as to the REAL growth in the proprietary reverse mortgage products. I have confronted such optimism only to find out, the message was distorted and groundless; I also believe that one of these purveyors of false tidings was intentionally misled to make this reverse mortgage sales manager feel that his optimism about proprietary reverse mortgages was justified — which it was not.

FHA approved mortgagees who offer proprietary reverse mortgages need to demand integrity when it comes to proprietary reverse mortgages data which is now nothing more than anecdotal (a kind word for hearsay). What the current situation displays is a lack of trust among reverse mortgage lenders. Yet these same lenders compete in an industry where their HECM endorsements and detailed related to those endorsements have been reported for decades. Lenders have complained that such reporting about proprietary reverse mortgages would provide their competitors an unfair edge. Why? We have received no formal explanation.

So here’s one suggestion — do what HUD does. HECM closings are reported as endorsements about four months after the related HECM closing takes place. If lenders delay the reports and do it as an industry, all lenders will get gross closing information BUT not the breakdown information that comes in the monthly HUD Production Report for FHA and in the monthly HECM Snapshot report. So that there are no complaints about the lack of independence of the reporter, I suggest an independent third party compile and report the data, not RMI or New View Advisors. The independent provider should also be engaged to provide assurance reports monthly by sampling the data that is being provided by lenders to discourage double counting, exaggeration, improper reporting, and other inherent errors that maybe found in compilation reporting. Such assurance services could be done each month but no lender would be examined more than once quarterly. This service could be provided by a CPA firm which does not have clients in our industry.

If lenders complain about that suggestion, why are they in an industry where THE primary regulator reports DETAILED information about endorsed HECMs in its monthly HECM Snapshot Report? To gain even a highly summarized monthly report we will need to see a level of cooperation, collaboration, and trust NEVER seen before among reverse mortgage lenders but it is time we see such integrity among lenders toward one another so that trust is established in how popular proprietary reverse mortgages really are!!! If trust is the basis of our originations, let us apply it to the reporting of proprietary reverse mortgages with one caveat. Such trust needs the strength of verification.

Reply
The Cynic February 4, 2020 at 11:41 am

Case Number Assignments (CNA) are the principal indicator provided to the industry providing real insight into future endorsements. What is very interesting is that October 2019 had the highest CNA count (5,600) for ANY month since September 2017 (with its CNA count of 20,400, the highest CNA count ever recorded in the industry). Since October 2019, we watched November 2019 CNA count drop of 4,481 and in December 2019 the CNA count for that month dropped to 4,165. The December 2019 count was the lowest CNA count for any month since February 2019.

Growth, where is that growth? Comments from NRMLA Convention attendees made it seem like we were coming into a period of growth. Yet the CNA counts for November and December 2019, coming out of the Convention have been low and lower yet. If the industry is riding the horse of proprietary reverse mortgages as it tried to do in 2007 and 2008, the disappoint could be far more profound than it was over a decade ago. Remember that growth comes from anecdotal evidence, among the most unreliable kind. Who is compiling that data and reporting to the industry? The “data” is more like guesstimates mingled with ultra optimism. In some very pointed cases, industry participants have been disrespectfully provided “expedient exaggeration” instead of what they deserve, facts.

The only reliable source of data on reverse mortgages is HUD. HUD is unbiased. It has no axe to grind. It has no dog in the race. Its interest is providing the industry with facts.

It is hard to disagree with the prior comment calling for delayed and at least highly summarized reporting of verified proprietary reverse mortgage data from a reliable source not dependent on the industry for a substantial portion of its revenue. Such an independent company would bring a level of integrity to monthly proprietary reverse mortgage closing counts that would be hard to find from others, even NRMLA.

Reply
robin d faison February 15, 2020 at 1:28 pm

Why does all of this “reporting” matter? So what if the proprietary sales are up or down? What is the end result for such reporting? Will it change anything in the industry? I would like to know. NRMLA , of course, has a huge stake in the game. The entity wants everyone to be happy and keep closing loans. Their business depends on it. Of course they want to keep some information under the table, and keep those convention goers making hotel reservations. NRMLA is not independent.

Reply

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