Reverse mortgage market closes out October with positive gains

But analyst warns recovery will be slow and uneven

Reverse mortgage volume inched upward last month, continuing its uneven road to recovery after a rough year.

According the latest HECM Lenders report from data analytics firm Reverse Market Insight, endorsement volume rose 7.3% in October to 3,091 loans.

RMI President John Lunde said the numbers continue to point to a slow recovery for the HECM industry, which has seen volume nosedive this year thanks to program changes issued last October.

“We are expecting a very slow and lumpy growth for the foreseeable future in HECM volumes,” Lunde said.

Lunde said it’s been a rough year for the reverse mortgage space. Aside from low volume, the industry has been dealing with a host of other issues.

“Keep in mind the other big issues this year are the declining margins, increasing interest rates and lower loan sizes that are reducing the revenue per loan too,” Lunde told HousingWire. “Between that and declining loan counts, it's pretty tough on the origination side right now.”

Despite the obstacles, most of the top lenders in the space had a positive month in October, with eight of the top 10 posting gains, according to RMI’s report.

One Reverse Mortgage, a subsidiary of mortgage giant Quicken Loans, had the best month of them all, closing 247 loans and posting a nearly 25% gain month over month.

Reverse Mortgage Funding was not far behind. The New York-based lender closed 218 HECM loans and saw a 23% uptick in volume over the previous month.

Synergy One Lending – which was acquired by Mutual of Omaha Bank earlier this year and just announced its expanded footprint in the Midwest through the acquisition of Illinois-based BBMC Mortgage – saw its volume rise 16% in October.

Lunde said it’s hard to say if the gains seen by leading lenders is a sign that their strategies to combat the down market are gaining any real traction.

“Any single month is tough to draw big conclusions from on this,” he said. “Time will tell, but we'll know a little more too once we see our HECM Originators report and updates to our dashboard for subscribers, which breaks down H4P/refi/other by lender and area so we can really see what's driving the volume.”

Across the country, eight out of 10 regions saw positive growth, with New England leading the charge with 34% and the Southwest coming in second at 29%.

But overall, the industry has seen competition wane. Lunde said the space has seen a drastic decline in participants.

“A year ago, the industry was typically seeing 200-230 active lenders in any given month,” he said. “The recent range has been more like 150-170, which is a significant drop.”


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