For the first time since the last year’s reverse mortgage program changes kicked in, the HECM industry saw growth in both its retail and wholesale channels.
According to the latest data from analytics firm Reverse Market Insight, HECM retail endorsements rose 8.2% while wholesale grew 12.1% in August. The month saw overall endorsements rise 9.8%.
RMI President John Lunde said the last time both channels experienced growth was in January, when industry volume was dominated by loans originated prior to the 10/2 changes.
It’s a positive sign that the industry is on the road to recovery, according to Lunde.
“This suggests more sustainable volume levels longer term than a more narrow recovery in just one channel or the other would,” Lunde said. “Obviously, it’s not as good as stronger growth, but I think it sets the stage for future growth and recovery.”
Of the top 10 HECM lenders, seven saw their volume increase from July to August.
Quicken Loan’s subsidiary One Reverse Mortgage led the charge with a 22% uptick, while Live Well Financial came in a close second with a 20% jump. Synergy One Lending, which merged with Mutual of Omaha Bank in July, came in third with 16%.
Lunde said the numbers indicate that lenders have gotten a handle on the new rules now that a year has passed.
“I'd say it's reasonable to think some of the breadth of increases for lenders suggest they're getting over some initial hurdles in adjusting to the new rules,” he said.
RMI’s HECM Lenders report has already revealed that September was a down month for the industry, but Lunde said it all adds up to a slow recovery.
“Our next year or two looks like a slow creep upward with plenty of bumps along the way,” he said.