Truth in Numbers

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An honest assessment of HECM loan volumes & consumer demand

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Just where does the reverse mortgage industry stand today? Are we on the road to explosive growth, a mild recovery, or are lower loan volumes for the remainder of the year? Somewhere between extreme exuberance and pessimism lies our new reality. Since I’m going to take off my commentary hat for a moment, let us objectively review the numbers. 

First consumer demand as represented by FHA case numbers issued when a borrower’s application is submitted. Overlaying FHA case number assignments for 2017 and 18 above 2018 and 19 we can see that application activity has dropped considerably. Due to the government shutdown in December 2018 the best comparisons are in the months of February through July. What is clearly seen is the real-life impact of FHA’s October 2017 reduction of principal limit factors…

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The Source of All HECM Endorsements

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The leading indicator of HECM loan volume

Which came first the chicken or the egg? There’s no number that reverse mortgage lenders and originators track more closely than our monthly endorsement totals. That is, the number of federally-insured reverse mortgages that are formally ‘insured’. In fact, our monthly Top 100 HECM Lenders report is the single most popular item on HECMWorld.com. As our industry closely follows the number of HECM loans endorsed each month there’s another metric that is largely overlooked, Case Number Assignments (CNA’s). While all originators know that endorsements come from an application for a federally-insured reverse mortgage, many are not closely watching the leading indicator of future loan endorsement volumes.

FHA HECM case numbers are issued when a reverse mortgage application has been officially submitted. As such they are our most accurate barometer of consumer interest as evidenced in submitted applications. Case numbers also provide a leading indicator of future month endorsement totals. FHA publishes their most recently released case number assignments in their monthly publication entitled the “FHA Single Family Production Report” which tracks the issuance of case numbers for traditional and reverse mortgages insured by the agency.

The historical average time from a HECM’s case number assignment to endorsement is…

Despite Challenges This Was the Best HECM Decade


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A long-term perspective of HECM endorsement volume

Our collective experience as reverse mortgage professionals shapes our perspective. Much of that perspective in recent years was influenced by falling endorsement volumes.  The reverse mortgage industry posted a record 114,000 endorsements in 2009 just as the housing and economic crash began in earnest. Consequently volumes plummeted with housing values. In the years that followed, endorsement declines were commonly attributed to increased relegation and product changes. But what perspective can we gain when looking at our industry’s growth in the last decade?

James Veale is a numbers guy. Not surprising considering his extensive work prior to originating reverse mortgages as a Certified Public Accountant with a Masters in taxation. In his recent column published in Reverse Mortgage Daily Veale writes, “During the last decade, the industry produced more than twice as many endorsements (707,915) as the total endorsements for all fiscal years that preceded it (346,177). We not only saw the 500,000th endorsement in the last decade but also the 1 millionth.”

As a frame of reference, let’s review previous HECM marketing efforts.The summer edition of Reverse Mortgage Magazine published by the National Reverse Mortgage Lenders Association (NRMLA) touted 2017 as the ‘30th anniversary of the HECM’. In its first decade, the HECM was a relative unknown to older homeowners. That quickly changed in the mid-2000’s when big bank lenders such as…

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Do We Have It All Wrong?

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There’s a Silver Lining in HECM Endorsements That is Overlooked

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The chorus of dismay from reverse mortgage professionals lamenting declining reverse mortgage loan numbers began after the Great Recession and continues through today. Consequently, a sense of frustration and futility has set in for some who believe our industry was decimated in the aftermath of the housing crash, product restrictions and the Financial Assessment. But do we have it all wrong? In other words when considering HECM endorsement volumes are we comparing apples to oranges? Do mere annual sales numbers reflect the true state of our industry?

Jim Veale is more than an industry veteran- he’s a numbers guy. Not surprising considering his background as a CPA with a Masters in Business Taxation. While often outspoken on industry issues, Jim has been my personal go-to guy when it comes to the more technical aspects of the HECM market. His recent Op-Ed in Reverse Mortgage Daily does not disappoint.

“Most sales managers, originators, and other participants in the Home Equity Conversion Mortgage industry are longing for significant validation that the sales efforts of this decade have had any meaningful results.

Remaining Lenders Grow: August 2011 Top 100 HECM Lenders Report

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Download the August 2011 Top 100 HECM Lenders Report here.

Big Names disappear, survivors grow

It’s strange to no longer see the familiar name of Bank of America on the top lenders report. Wells Fargo remains because endorsements usually trail applications by 3-4 months so soon they will fade from the top 10. What’s most interesting are the large and medium lenders who have begun to grab some of the market share left in the absence of Wells & B of A.
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You can click to see our video on race for market share.