Based on the latest HECM endorsement data from Reverse Market Insight (RMI) and HMBS issuance data compiled by New View Advisors, the industry is experiencing a shift in volume.
Lower HECM volume telegraphed by rate increases
RMI leaders had anticipated a decrease in volume due to the spike in the 10-year Constant Maturity Treasury (CMT) index observed late last year, and this trend is reflected in the March endorsement data. Most top HECM lenders, with the exception of HighTechLending, saw a decline in endorsement activity.
HighTechLending managed to buck the trend with a 29.3% increase to 53 loans in March, its highest monthly figure since September, according to RMI.
Mutual of Omaha Mortgage led with 476 loans in March, 56 loans ahead of Finance of America (FOA). While Mutual’s endorsements dropped by 2.1%, South River Mortgage saw a milder decline of 1.5% to 66 loans.
RMI’s Jon McCue noted that the recent publication of reverse mortgage performance reports by the Federal Housing Administration (FHA) provided more clarity to the industry.
McCue stated, “We knew it had to be happening, but other than endorsement data which lags application data we didn’t know how much that increase in the 10-year CMT was affecting the market.”
RMI reports that clients are increasingly seeking reverse mortgages to address specific financial needs arising from various expenses faced by retiree homeowners.
HMBS issuance sees an increase
New View Advisors reported that HMBS issuance in March reached $487 million, up $17 million from February. FOA was the top HMBS issuer, followed by Longbridge Financial and PHH Mortgage Corp/Liberty Reverse Mortgage.
Despite the RMF portfolio’s lack of pools issued in March, the HMBS market remains healthy according to Michael McCully of New View.
First-participation production of original HMBS pools also increased in March, with 21 first-participation pools out of 70 issued pools.
McCully emphasized that industry professionals should not expect a significant spike in reverse mortgage volume amidst economic volatility.