After I posted FHA Outlook Report Shows Projected HECM Volume Up, different RMD readers were quick to mention that the numbers didn’t make much sense. According to HUD’s numbers, they are projecting that there will be 200,000 HECM applications and 210,000 endorsements in FY 2009.
I’m no mathematician, but it’s hard to have more endorsements than applications. The only way it would might make sense is if applications taken in FY 2008 ended up closing in FY 2009.
Being that Topher Thiessen from RM Insight loves to analyze data, he contacted HUD about the projected HECM endorsements and here is HUD’s response:
The figure should be 166,000. 210,000 was an original estimate based on a much larger estimate of applications and we did not catch it since we were primarily checking forward mortgages, as to the purchase and refinance break. Also, these projections are not necessarily the Dept official estimates. They are estimates of the expected level of activity given the current level of activity and will change as the year progresses.
Zenora Hines – HUD
I thought that HUD might be estimating a little high, but 44,000 endorsements? Note to self, give HUD a 20% margin of error on all HECM predictions.
RM Insight can give you better projections, check them out