Reverse Mortgage Endorsements Get ‘Sugar Rush’ in October

Home Equity Conversion Mortgage (HECM) endorsements rose by 36.2% to 3,296 loans for the month of October 2019, a boon to the activity observed over the last couple of months with all major regions and the majority of the top 10 lenders recording increases in activity. This is according to the October HECM Lenders report compiled by Reverse Market Insight (RMI).

“[October’s activity is] providing a nice sugar rush to this post-Halloween morning for reverse industry folks,” said RMI President John Lunde in the commentary accompanying the data.

While every major region posted gains, particular regional standouts include New York/New Jersey (rising 72% to 215 loans); New England (59% to 124 loans); and the Southwest U.S. (53.9% to 314 loans).

Seven of the industry’s top 10 lenders posted gains, with the most prominent increase coming from HighTechLending (rising 66.7% to 65 loans). American Advisors Group (AAG) posted an impressive 61.4% increase to 1,277 loans, a figure that on its own is larger than the second- and third-highest lender totals combined, Lunde notes.

Rounding out the major gains is Synergy One Lending, posting a 53.9% increase to 314 loans.

In terms of how this data could telegraph endorsement figures for the remainder of the year, Lunde said that a favorable interest rate environment could end up being generally positive for the endorsements that will arrive through the end of 2019.

“I’d expect some continued lumpiness, but as long as the 10-year rates continue to be well below the PLF floor of 3%, it’s an encouraging sign for reverse mortgage volume,” Lunde told RMD in an email.

Still technically listed among the top 10 for year-to-date numbers is shuttered lender Live Well Financial, which has dropped to the number nine lender for 2019 in year-to-date figures. Excluding Live Well from the list would HighTechLending and Open Mortgage the ninth- and tenth-highest ranked lenders, respectively.

As noted last month, leaders in the U.S. House of Representatives and U.S. Senate will have to take action by the end of the month to avoid another partial federal government shutdown at the end of the year, as seen in December 2018-February 2019. Lawmakers have until November 21 to either reach a new funding deal for the next year, or to pass another stopgap bill that will expire just before Christmas.

If Congress fails to act or pass another stopgap bill by that point, it’s possible that a new shutdown could take place at the exact same point in time that the last one did, and for the same overarching reasons.

Read the HECM Lenders report at RMI.

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