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Robust Reverse Mortgage Market Expected Through 2020

The reverse mortgage market is stronger than ever, according to a new report. 

Data published by Reverse Mortgage Daily reveals that Julys statistics indicate the reverse mortgage market is holding strong. In fact, the market appears to be in better shape than ever before. 

Specific highlights of the report revealed that according to data procured from Ginnie Mae and other various expert sources, the production of new Home Equity Conversion Mortgage (HECM)-backed securities (HMBS) for July was an impressive $1.42 billion. Reasons for this include the slow but sure recovery of capital markets and consistently low interest rates, both of which are spurring healthy production and an ample seasoned pool. All of these factors culminate into what has now formed the highest issuance level since February 2018. 

Further revealing the markets strength is the fact that the U.S. Department of Housing and Urban Development (HUD) reported a 4,256 HECM endorsements during the month of July. This marked an impressive increase from Junes 4,209 endorsements, yet failed to reach the apex of Mays counts. 

However, experts have pointed out that Mays higher statistics could have been a direct result of a backlog of endorsements resulting from the hubbub caused by the coronavirus pandemic. Also affecting raised levels of HMBS issuance are several larger economic factors, as well as the implementation of new rules implemented by the Federal Housing Administration (FHA) in October 2017a move which caused reduced activity in reverse mortgage business.

Another highlight pointed out is an increased interest in the reverse mortgage product category. 

Michael McCully, Partner at New View Advisors, commented on this trend and how it specifically related to the markets current health and vitality: We have seen a steady upward trend in HMBS issuance all year, and anecdotal evidence of record or near-record applications and new originations from lenders.

McCully further noted that the this uptick causes him to forecast a hopeful view for the industrys performance from now throughout 2020. He reiterated that although the transition away from the LIBOR index may be a volatile factor, all other signs are overall quite positive.

About Author: Andy Beth Miller

Andy Beth Miller is a well-established freelance editor and writer with almost 20 years’ experience working within the media industry, contributing to various publications such as Lonely Planet, Zicasso, Honolulu Star-Advertiser, Midweek Magazine, Kauai Traveler Magazine, HILuxury, and many more. She also currently serves as the Editor-in-Chief of ProcuRising Magazine, which enables procurement professionals to increase their knowledge base within a creative and collaborative community.
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