HECM Endrosements Falling, But Still High

A June dip follows a spike last May and still accounted for the second highest endorsement tally in over a year.

Total endorsements for home equity conversion mortgages declined by 16.4% during June, according to the newly published HECM Originators report from Reverse Market Insight (RMI).

During June, wholesale endorsements recorded a 25.5% drop while retail endorsements slid by 8.6%. A total of 4,203 HECM loans were endorsed during the month, and RMI observed June’s total was the second highest in more than a year.

Among the major HECM lenders tracked during June, RMI noted HighTech Lending Inc. saw its volume spike by 604% to 169 loans, making up for slower activity over the two previous months. Mutual of Omaha Mortgage saw an upswing of 11% to 272 loans, marking a second consecutive record high month for the company.

Within the realm of the smaller originators, RMI found GoodLife Home Loans recording a 152.9% spike to 43 loans in June, while South River Mortgage, a relatively new entry in the reverse mortgage space, saw its activity swell by 450% to 22 loans while American Financial Mortgage increased 125% to 18 loans.

June’s relatively mild data results followed a dramatic turn in May, when HECM endorsements spiked by 214.8% for a total 5,027 loans. During May, retail endorsements surged by 235.5% while wholesale levels skyrocketed by 193.4%.

“HECM endorsements recovered dramatically in May after HUD and lender operations challenges related to the pandemic constrained volume in April,” stated RMI in announcing the May data.

Separately, the Department of Housing and Urban Development’s Office of the Inspector General issued a fraud bulletin that warned borrowers against potential schemes related to the reverse mortgage process. The bulletin cited how scammers could attempt to pilfer a borrower’s Social Security number and force them into entering dubious legal agreements, adding that due to the “economic uncertainty caused by the pandemic, HECM borrowers may become targets of schemes designed to take advantage of those seeking reverse mortgages.”