Arizona is Bright Spot in Reverse Mortgage Volume Slump

Endorsements for Home Equity Conversion Mortgages (HECMs) may have hit a 14% annual decline in June on a national basis, but regionally speaking, Arizona has so far been a diamond in the rough, according to the latest data from Reverse Market Insight.

In total, the number of HECM endorsements topped 27,648 loans in June, a 14.1% decrease compared where volume sat during the same month a year ago, when it was 32,202 units, notes RMI in its HECM Trends June 2014 report.

While eight of the top 10 states posted declines in endorsements, Arizona trumped California (4.6%) as the only other state to report an increase with 32.2% loan growth in the first half of the year compared to its pace during the same period last year. Alternatively, California posted the highest volume with 4,711 loans, while Arizona posted 976 for the sixth ranked spot on the top-10.

When ranked geographically by city, Phoenix just made the cut falling in at the ninth overall spot with 145 loans through June 2014, a 107.1% increase compared to the same period in the previous year and the highest overall growth among the top-10 cities.

The Grand Canyon State’s performance in June is further highlighted by a 46.8% volume increase seen in Maricopa County (#2), along with the fourth-highest zip code, Sun City’s 85375, which reported 42 loans from January to June 2014—an average of seven per month in the zip code alone, RMI noted.

Arizona’s two largest metros of Phoenix (#1) and Tucson (#3) each were among the top ten cities for total maximum claim amount growth, growing a little more than $18,000 and $8,500 to $33,069 and $25,266, respectively.

On the originations side, the number of active originators thinned out considerably in the first half of 2014 compared to the first half of last year, dropping 13.8% to 589, compared to the 683 unique origination companies in January through June 2013.

Written by Jason Oliva

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